What to make of steeper EM yield curves?

The steepening of EM local currency government bond yield curves since the crisis began in mid-February largely reflects a fall in short-term rates, but in some cases, like Brazil, Mexico and South Africa, it also reflects persistently high long-term borrowing costs. This adds to the reasons to expect policymakers there to turn to austerity and financial repression once the crisis is over, which will weigh on recoveries.