Shares of countries with emerging markets (emerging markets) have risen more than 20% from October’s low amid weakening global inflation and hopes that the U.S. Federal Reserve will soon slow the pace of interest rate hikes, The Financial Times writes.

Counting on a slower rate hike is causing growing enthusiasm for the asset class, analysts say.

The MSCI Emerging Markets Index (NYSE:EEM) is up more than 21% from its intraday low on Oct. 25. Traditionally, a 20% increase is considered a move into a bull market.

Between February 2021 and last October, the indicator fell more than 40%. The strengthening U.S. dollar has caused an outflow of money from risky assets, including emerging markets stocks and bonds denominated in local currencies. Investment funds that buy such assets experienced the largest loss of money in 2022 in the history of observation.

Bank of America (NYSE:BAC) Securities analyst David Hauner believes that last week’s report of a drop in activity in the U.S. service sector has bolstered investor expectations that the Fed will raise interest rates this year less than previously forecast.

“There is growing enthusiasm for what could be a long-term outperformance of emerging markets over U.S. assets,” he said.

Investors saw reason for optimism in the Chinese economy, where an easing of anti-commodity restrictions is likely to be followed by a rebound in activity later this year. Growth in output in the People’s Republic of China often benefits other emerging economies that supply the country with goods and resources.

Chinese stocks, which have the largest weighting in the MSCI EM index, have risen significantly since the fall. According to FactSet, the China sub-index has soared more than 45% in dollar terms since Oct. 31. Markets in Taiwan and South Korea have also shown significant gains over the period.