What Can Emerging Markets Expect from a Fed Hike?

USD100, cc Flickr Gisela Giardino

Emerging market governments are nervous ahead of Thursday’s big decision – itself covered in a Geopoliticalmonitor.com article last week. The problem has to do with a widening dissonance at the heart of US monetary policy. The Fed is mandated to make its decisions based on the health of the domestic economy, where the ‘green shoots’ of yesterday are now maturing into trees. But in the age of globalization, the Fed is no island; its decisions will send ripples to some corners of the global economy and storm surges to others. And if the damage in emerging markets reaches a certain level, it will in turn impact the United States and derail the economic recovery that predicated a Fed hike in the first place.

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