The Dual-Center Global Financial System by Tao YUAN

Author:Tao YUAN
Language: eng
Format: epub
Publisher: Springer Singapore, Singapore

3.1.3 The Unstable Interest Rate of the U.S. Dollar

Since the economic policies of the U.S. government and the U.S. Federal Reserve always focus on the U.S. domestic growth, it is understandable that the interest rate of the U.S. Dollar fluctuated continuously and violently.

When the U.S. economy was booming the interest rate of the U.S. Dollar went up, and liquidity of the U.S. Dollar decreased, and sometimes too insufficient for other countries. When the U.S. economy was in recession the interest rate of the U.S. Dollar went down, and liquidity of the U.S. Dollar became abundant, and sometimes too abundant for other countries. When the U.S. economy was in great crisis from 2008 the interest rate of the U.S. Dollar became so low, and liquidity of the U.S. Dollar became so abundant, which brought worldwide huge inflation (Chart 3.7).

Chart 3.7Central Bank policy rate of the U.S.

Source http://​data.​imf.​org/​regular.​aspx?​key=​60998111

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