empty
23.09.2022 10:50 AM
Hawkish Fed could push the world into recession

This image is no longer relevant

Measures taken by the US Federal Reserve to curb inflation in the country could lead to a recession in the global economy.

To combat inflation, the Fed slowly exited the blocks, underestimating the rise in prices, considering this a temporary factor.

And now, it will have to do much more to achieve the same effect, which means that advanced and emerging economies also have to do much more to cope with inflation.

Emerging markets from Ghana to Kenya bear the brunt of Federal Reserve Chairman Jerome Powell's push to raise borrowing costs, causing global currencies to weaken and debt service costs to rise.

The Fed's signal on Wednesday that it could tolerate a recession as a necessary trade-off to regain control of inflation means that the global economy could plunge into a deep recession.

The biggest loss is the loss of trust. Whatever they do, they must restore trust. The only currency of central banks is trust.

Rising US interest rates are effectively blocking frontier markets from capital markets, urging investors to consider fundamental factors rather than "hype."

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Trump Keeps Hitting a Wall

There's a saying: "An irresistible force meets an immovable object." It describes an irreconcilable standoff where neither side is willing to compromise. In my view, Trump's "scythe," with which

Chin Zhao 00:12 2025-06-24 UTC+2

Should We Expect De-escalation in the Middle East?

The market has absorbed the news of U.S. strikes on Iran's nuclear facilities quite resiliently. Why did this happen, and why was the reaction relatively muted? These questions are unlikely

Chin Zhao 00:12 2025-06-24 UTC+2

What Will Powell Say?

Starting June 24, Fed Chair Jerome Powell will address Congress over two days, delivering the semiannual monetary policy report. On Tuesday, he will speak before the Senate Banking Committee

Irina Manzenko 00:12 2025-06-24 UTC+2

The Euro Gets a Knife in the Back

Trouble never comes alone. European industry is beginning to lose steam after rapid growth driven by a front-loaded surge in U.S. imports. The euro area is a net oil importer

Marek Petkovich 00:11 2025-06-24 UTC+2

XAU/USD. Analysis and Forecast

Today, gold is attracting new sellers. Amid a sharp escalation in the conflict between Iran and Israel, the United States conducted airstrikes on three Iranian nuclear facilities in Fordow, Natanz

Irina Yanina 17:59 2025-06-23 UTC+2

USD/JPY. Analysis and Forecast. The Japanese Yen Maintains an Intraday Bearish Outlook

Today, Monday, selling pressure on the Japanese yen dominates, driven by several factors. Traders continue to push back expectations of a potential rate hike by the Bank of Japan, assuming

Irina Yanina 17:56 2025-06-23 UTC+2

USD/CHF. Analysis and Forecast

At the moment, the U.S. Dollar Index (DXY) has reached a new two-week high, driven by hawkish signals from the Federal Reserve. The U.S. central bank has maintained its forecast

Irina Yanina 17:51 2025-06-23 UTC+2

Bitcoin longing for new highs, but something stymies

Bitcoin was created as a way to preserve value in times of turmoil, especially against the backdrop of weakening fiat currencies. It was believed that the arrival of institutional investors

Marek Petkovich 12:23 2025-06-23 UTC+2

Market fears retaliation

Hope for the best, prepare for the worst. Since the onset of the Israel-Iran conflict, the market seems to have largely ignored the severity of the situation. Investor reaction

Marek Petkovich 10:36 2025-06-23 UTC+2

The U.S. Joins the Iran-Israel War. What's Next for the Markets? (Limited downside potential for #NDX and #SPX contracts possible)

The United States could not abandon its satellite and Middle Eastern proxy—Israel—to face Iran alone. On Sunday, it struck Iran's nuclear facilities, though these strikes failed to achieve their objectives

Pati Gani 09:51 2025-06-23 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.