Higher U.S. Interest Rates Spell Trouble for the Developing World

Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve, May 4, 2022 in Washington (AP photo by Alex Brandon).
Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve, May 4, 2022 in Washington (AP photo by Alex Brandon).
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It’s a widely acknowledged truth that when the United States’ economy sneezes, many countries catch a cold. And so it is with this week’s interest rate hike by the Federal Reserve in Washington, whose efforts to contain inflation in the U.S. are sure to create new problems for already battered economies and families in less affluent countries. The move will unintentionally pile onto the multiple, interconnected crises and growing challenges already facing developing countries. As I noted a few weeks ago, Russia’s war on Ukraine is sending economic, and therefore political, shockwaves across the planet, from Peru to Sri Lanka. Now comes the […]

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