Interview: The Fed ’s interest rate hike has a negative impact on the world economy -Morrison, a scholar visiting the London School of Political Economics

Xinhua News Agency, London, August 2: Interview with the Federal Reserve ’s interest rate hike on the world economy -Scholar Morrisen, a scholar visit to the School of Political Economics, London

Xinhua News Agency reporter Huang Zemin

James Morrison, an associate professor at the London School of Political Economics, said in an exclusive interview with Xinhua News Agency reporters that the interest rate hike of the Federal Reserve will inevitably have a negative impact on the world economy. One of the dilemma caused by policy makers.

The Federal Reserve announced the 75 basis points of interest rate hikes at the end of July. This is the fourth rate hike this year, and it is also the second consecutive interest rate hike 75 basis points, which is the largest concentrated interest rate hike since the early 1980s.

Morrison said that the level of inflation in the United States is still high. Continuously raising interest rates highlight the slow initial operation of the Federal Reserve. He believes that the United States' measures to respond to inflation have caused the world economy to decline, depending on the Fed's interest rate hike path.

"If the US economic growth rate has slowed down, the US demand for global goods and services will also decline. The Federal Reserve raises interest rates, and the cost of loan will rise. It will be more difficult for other economies to borrow financing in the open market. . "Morrison said.

Morrison believes that U.S. economic policies are facing challenges to weigh. "In the past 10 years, the United States has injected a lot of funds into the economy. Now the Fed is trying to gradually suppress inflation. If the step is too fast, the economy is risk of recession; if the action is too slow, the high inflation will continue." He said.

Morrison pointed out that developing countries have greatly affected the changes in the dollar. The rise in US dollar exchange rates will make it difficult for some developing countries to even be unable to repay debt denominated in the US dollar. The strengthening of the US dollar may also lead to some difficulties that rely on cheap imported goods, and the global trade model will change accordingly.

Morrison also said that Europe was also affected by the Federal Reserve's interest rate hike. Recently, the euro exchange rate on the US dollar fell below 1 to 1 is one of the impacts. "This exchange rate trend is more profound and practical. The trade and investment models between the United States and the European Union, the United States and Europe, and other countries will change."

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