Post covid era witnessed a substantial downward leap in job opportunities and employment statistics. Many big companies have laid off their employees, leaving people in desperation and helplessness. This has affected the spending habits of people around the globe. In addition, tensions across Europe and Russia due to Ukraine- Russia war have involved all the nations in waves. All of these lead to inflation on a large scale, and inflation can not avoid, as per top economists and statisticians. This has left the federal reserve with no choice but to raise interest rates in the US to fight the effects of inflation in the economy. This has increased the value or strength of US dollar by an ever-increasing number recently.
Statistics of Federal Reserve’s Interest rates and US dollar in different years:
This Graph shows federal reserve’s interest rate in last one year. As mentioned our previous article, federal reserve rates changed rapidly and at a fast pace, the graph below shows the federal reserve rate in previous years. To check current interest rates click here
The Graph below shows the consumer price index from last one year and it shows how consumer patterns have changed in recent times leading global consumer good and indstrial supply crises etc.
Impacts of rising US dollar on the country and the rest of the world:
USD has been a strength for world currencies and economies. It has a very impactful control over world economies, including large developed nations. A strong US dollar means depleting the value of the currencies of other countries. Although Be it emerging economies or powerful nations, the waves of increased federal reserve rate and the increasing importance of the USD have caused some significant problems. The majority of the G20 economies, including India, China, and Uk have fallen since the first quarter of 2022.
The role of the US capital market is beyond its boundaries. Thus their financial flows are like the center of the oceans triggering waves. Because those waves impact economies, many nations will need assistance, especially those with debt in US dollar, to pay back.
The series of events around the globe, such as the coronavirus pandemic, fiscal and monetary expansions followed by post-pandemic industrial equilibrium crises, and Russia’s invasion of Ukraine leading to food-related shortages and energy crises, has triggered the global deep recession.
Thank you for reading 🙂
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Sukhpreet Kaur
