Unfortunately, what happens at the US Fed does not stay there. It has an influence on exchange rates and financial markets all over the world and it is important to try to understand what happened last week. We know that the American inflation rate is above 9% and to fight it the Federal Reserve Bank first ended their policy of quantitative easing and then started to raise interest rates. The hope is for a soft landing, which means that they bring inflation under control without dampening economic activity or job creation too much. Exactly what the state of affairs is, is difficult to determine.
* The Economics Minute is supported by the NWU Business School.
