- October 10, 2022
- Posted by: Stratford Team
- Category: Economy
Federal Reserve officials have been getting an earful about the economic threat that the US central bank’s rapid monetary tightening presents to the rest of the world — complaints that will no doubt be amplified at this week’s meetings of the International Monetary Fund and the World Bank.
The Fed must focus on what’s best for the US, so there’s little it can do to mitigate the global repercussions of its actions. That said, it should at least do a better job of explaining itself.
The complaints are amply founded: The Fed’s aggressive monetary tightening is undoubtedly imposing stress on the rest of the world, in large part by boosting the exchange rate of the dollar to other currencies. In developed countries, this drives up prices of imports such as crude oil, stoking inflation and forcing central banks to respond with matching rate hikes — even in economies where inflation pressures are relatively mild and growth is weaker. The effects…
