The recent inflation in the interest rates in the United States could potentially lead to some drastic decisions by America’s Central Bank that would send the shockwave across international markets, leaving the vulnerable countries at risk, the global monetary fund has warned.
Moreover, The sharp increase in price around the globe is felt; struggling nations should prepare themselves for extreme actions from the United States Bank, The Federal Reserve. The IMF official stated inflation rates. According to the stats of past years, due to the rise in inflation, investors have to price. Moreover, the US, given the unsteady economic recovery and a slow unraveling of supply bottlenecks,”
The inflation rate has hit an all-time high of about 6% in almost four decades. Financial markets have estimated that the Federal Reserve will increase its interest rate four times in 2022 and would also sell its bonds in the process of quantitative tightening. High US borrowing costs would increase the dollar’s value, making it more challenging to reach the struggling nations that have already borrowed heavily. The slow growth of the world’s biggest economy will undoubtedly affect the global market
According to an expert analyst at Deutsche Bank, Jim Reid, they caught this reality last year. The risk is present in the market until the current variant Omicron makes the market reluctant and faces many hawkish moves.
Thus, such an increase in the market creates a huge problem in the interest rates of the USA which indirectly worries the government.
