These results indicate that the large capital outflows shown in Figure 1 were concentrated in countries where economic fundamentals were weaker. While the sharp reversal of sentiment about emerging markets prospects and the resulting retrenchment in capital flows may have been triggered in part by expectations regarding Fed policy, the extent of changes in expectations and the magnitude of the adjustments for individual emerging market economies varied systematically based on their fundamentals. In addition, the correlations observed in the data demonstrate that outflows from countries with weaker fundamentals began well before Chairman Bernanke’s May 22 testimony. The remarks seem only to have intensified a pattern that was already evident in the data.