Will Emerging Markets benefit from a cautious Fed?

The Fed is likely to tighten monetary policy only by as much as markets allow without major turmoil. The FOMC statement showed that the Fed takes the financial market turmoil and the development in China and other emerging markets into account. 

Fed expectations of 4 rate hikes this year are unlikely. The actual path of the federal funds rate will depend on the economic outlook as informed by incoming data. For now markets are pricing in barely 1 hike this year. Will this cautious Fed stance benefit the Emerging Markets?

A more muted hiking cycle will definitely be welcomed by EM central banks. EM economies and assets typically outperform when developed markets illustrate above trend growth. So to expect EM currencies to illustrate a sustained appreciation trend simply because the Fed takes a more sanguine view may not be justified. Nonetheless a more muted pace of USD appreciation could mean at least one less macro risk to deal with.