Direction of US Central Bank Policy
The signs of a world recession have begun to appear, especially in the eurozone. Excessive increase for the umpteenth time will accelerate the world entering the brink of a recession.
Ari Kuncoro
The decision on the magnitude of the increase in the benchmark interest rate of the United States central bank or the Federal Reserve (the Fed) in the upcoming meeting on Dec.13-14 will catch the world's attention as the signs of a world recession have begun to appear, especially in the eurozone. Excessive increase for the umpteenth time will accelerate the world entering the brink of a recession.
However, the prospect of a recession, especially in the US, remains unclear because amid indications of a decline in economic activity, several indicators show signs of expansion. Another impact of the Fed's interest rate increase is the appreciation of the US dollar, which is considered to be too strong, especially due to the caution of international investors who adopted a "cash is the king" stance. The strengthening of the US dollar is an additional burden for import payments as well as principal repayments of developing countries and emerging markets because almost all global transactions are still denominated in US dollars.