Faster rate hikes from the Fed could shake financial markets

“A faster rate hike by the Fed could shake financial markets, which could slow down US demand and capital outflows from emerging markets,” the said International Monetary Fund (IMF) in a blog post published Monday.

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Widespread wage inflation or sustained supply bottlenecks could boost US prices more than expected and trigger faster rate hikes from the Fed.

We continue to expect robust growth from the United States as we see inflation moderating later this year.

We expect the global recovery to continue in 2022 and 2023, but risks remain high by the resurgent pandemic.

Emerging markets with stronger inflationary pressures or weaker institutions should act quickly to allow currencies to depreciate and raise interest rates reference.

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