Sentiment turned sharply in financial markets as 2018 moved into its second half. A renewed US dollar rally and escalating trade tensions resulted in an uneven tightening of global financial conditions. The Federal Reserve continued the gradual and predictable removal of monetary accommodation as the US economy gathered speed again, in part boosted by last year’s fiscal stimulus. Yet financial conditions in the United States, if anything, eased further. Conditions tightened somewhat in the credit markets of some advanced economies (AEs). In contrast, financing tightened sharply in emerging market economies (EMEs), which saw their currencies depreciate and their access to borrowing wane, amid signs of market disarray in the most vulnerable economies.[…]