Can the world afford a Fed rate hike?
A stronger greenback, higher borrowing costs for firms and govts may add risks to already-weak global recovery
New York
WHEN Group of 20 (G-20) finance ministers last week urged the Federal Reserve to "minimise negative spillovers" from potential interest rate increases, they omitted a key figure: US$9 trillion.
That's the amount owed in dollars by non-bank borrowers outside the US, up 50 per cent since the financial crisis, according to the Bank for International Settlements. Should the Fed raise interest rates as anticipated this year for the first time since 2006, higher borrowing costs for companies and governments, along with a stronger greenback, may add risks to an already-weak global recovery.
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