However, the Federal Reserve's policy decisions seem to have been written outside the boundaries of the United States. Last year, Federal Reserve officials felt they could raise interest rates because the economic situation in the United States seemed to have matured. But the reversal of the past few months shows how much the rest of the world has affected the Fed.
Former Indian Central Bank President Rajan said, "We are constrained by various factors, almost in prisoner's dilemma - in this equilibrium, no one can get rid of" 10 years of low interest rates. He is currently a professor at the Booth School of Business at the University of Chicago.
"Nobody wants to get ahead," Rajan said, possibly in the face of changes that the Fed has to deal with, from currency appreciation to a resurgence of volatility in asset markets.
Whether China chooses to fight tit-for-tat in the trade war launched by President Trump, the dependence of foreign companies on cheap dollar debt, or the inability of European and Japanese officials to shake off economic difficulties, it will ultimately prove that external forces cannot be ignored by the Federal Reserve.
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