While central banks are aware of all global economic data, they focus on their own economies, helping them do what is best for their own nations. In the U.S., that means the Fed is focused on improving the American economy.
to keep foreign direct investment flowing into their countries, which can hurt their local economies.It may sound cliche, but we do live in a global, interconnected world – something demonstrated powerfully by the COVID-19 pandemic and the supply chain issues that repeatedly. American businesses depend on other countries for supplies, workers and consumers.
That means even if the Fed manages a proverbial soft landing and is able to reduce inflation without causing a recession, a global downturn may still ultimately reach American shores. This could threaten much of the Fed’s success if the global slowdown results inSo while I believe the Fed is correct to keep its focus on the U.S. economy and lift rates at its Sept. 21, 2022, meeting as much as it deems necessary, I’ll be looking closely at the central bank’s economic projections.