US overnight interbank interest rates have risen by 300 basis points over the last 12 months, the fastest increase since 1989 and before that 1981. Reflecting higher yields in the United States, the dollar has appreciated by more than 10% against a trade-weighted basket of other major currencies in the last year. The US central bank's congressional mandate requires it to focus on controlling inflation and promoting employment in the domestic economy. Rapid interest rate increases to control inflation in the core are not necessarily appropriate at the moment in the peripheral economies. The risks to other economies from inflation and rising interest rates in the core have been understood by policymakers and investors for decades.

Source: News 24 October 01, 2022 20:11 UTC