Presentationof an article on globalbiznow

Presentationof an article on globalbiznow

1. The US Federal Reserve The Federal Reserve of the United States and Global Reach – How Fed Affects World and Indian Markets The Federal Reserve is the US central bank, having been founded in 1913. Three fundamental duties include controlling inflation, setting monetary policy, overseeing and policing banks, maintaining financial stability, and providing financial services to the public. The primary objectives of Fed monetary policy are: Maintain price stability: Control inflation. Boost job: Encourage Employment Control long-term rates of interest by juggling inflation and development. All decisions regarding interest rates and other monetary policy are made under oversight by the Federal Open Market Committee. From the rate at which customers borrow money to deciding world financial flows, these choices span the spectrum. In what way does the US Federal Reserve influence world markets? The reserve money of the globe is the US dollar.

2. The US Federal Reserve is: Changes in Global Capital Flow and Interest Rates Actually, one of the most well-known instruments the Fed uses is even the federal funds rate fluctuation, the rate banks lend to and borrow from one another overnight. Usually, a rise in U.S. interest rates enhances the U.S. dollar since international investors pour money into American assets to profit from better rates. Such a capital flight tsunami can empty the monies obtained from developing nations. Seeking more gains, investors can now take money back to the United States. The impact is especially strong for nations whose growth and development depend on foreign investments, a characteristic of many developing nations. Affect on India Capital leaves Indian financial markets with every Fed rate rise

3. Capital leaves Indian financial markets with every Fed rate rise in interest rates. This usually depreciates the Indian rupee more, which drives imports of goods such crude oil, which is priced in dollars, hence increasing inflationary pressures. For Indian enterprises with debt denominated in US dollars, US high interest rates also often increase borrowing costs. Economic Growth and World Trade Fed tightening of monetary policy would mean raising the interest rates, which would cause downward acceleration of American economic development. Because of their high borrowing prices, businesses as well as consumers would cut expenditure. Effects on India

4. Since the outbreak of COVID-19, the US Fed has implemented rather forceful monetary policies to help US economy. It methodically alarm international investors overseas and hence alter the flow of capital into India and other developing nations cause significant concern among others.