As America raises rates, the rest of the world bears the pain

In recent weeks, as the Federal Reserve prepared to intensify its fight against inflation, a noose has tightened around the neck of the global economy. On September 21st the Fed announced a 0.75 percentage-point interest-rate rise, its third in a row. The Fed’s benchmark rate now stands at 3-3.25%, up three percentage points since the start of the year. While the rise was forecast, the central bank offered a surprise: new projections revealed that rates would probably rise to more than 4.5-4.75% at the end of 2023, higher than expected. The projections also suggested that unemployment would rise by at least 0.7 percentage points before the end of next year.