The Fed is ‘not yet done’ with rate hikes: S&P Global Ratings

The latest decision to keep interest rates steady is “good news” for economies in the Asia Pacific region, Roache said.

With slowing global trade growth, Asian and other emerging markets will need to rely on domestic demand, which requires investment, he added.

“Investment typically means a wider current account deficit for these countries, and investment is also sensitive to interest rates,” Roache explained.

“On both counts, lower U.S. rates really helps these economies because it means they can run larger current account deficits, they can keep investment rates quite high,” he said. “That’s going to be very helpful for these economies that will be suffering, probably from slowing export growth as we go through this year.”

Be the first to comment

Leave a Reply

Your email address will not be published.