Credit conditions in emerging markets (EMs) will likely worsen, given persistent inflationary pressures, tightening financing conditions, slower growth in China, and the potential for a recession in the U.S. Inflation is not abating and its effects on EM households, corporations, and banks are yet to surface. So far, households and corporations have been able to manage higher prices thanks to fiscal and monetary stimulus, as economic activity resumes amid the ebbing effects of the pandemic. A protracted Russia-Ukraine conflict will likely keep pressuring prices, especially those of food and energy, through the year and potentially into next one. U.S. monetary tightening is already faster than expected. In our view, as high prices linger, the Federal Reserve will likely be aggressively increasing its rates in an effort to tame inflation. Furthermore, at current speed, monetary tightening has the potential to lead the U.S. into a recession, which could have knock-on effects on EMs.