Wrong monetary policy and incompetency of the U.S. government to instill confidence in the market are increasingly alarming the world, a Turkish expert has said.
The world is becoming more and more sensitive to U.S. hegemony and the dollar hegemony, Kaya Ardic, an international trade scholar at Piri Reis University in Istanbul, Türkiye, told Xinhua in a recent online interview.
In response, “countries around the world have begun to speak out, react more and more, and take necessary measures against the U.S. monetary policy,” Ardic said.
One such response, he said, is that countries reduce their holdings of U.S. debt stocks. “It’s a reaction to the U.S. policy.”
The United States is experiencing stagflation, and its economy has shown signs of recession, prompting it to abuse the dollar dominance even more, Ardic said.
“When a country’s economy experiences two consecutive quarters of negative growth, it’s called a recession. The U.S. economy contracted for two consecutive quarters, with annual growth falling by 0.9 percent in the April-June period,” he added.
To curb soaring inflation, the U.S. Federal Reserve raised its benchmark interest rate by 75 basis points in July, the second straight and the largest rate hike since 1994.
The expert warned that this disturbing situation in the United States, the world’s largest economy, will also profoundly affect other countries as they will face economic development challenges.
“Rising energy and food prices complicate all economies, both developed and developing. It’s hard to be optimistic against this backdrop,” he said.
The scholar emphasized that Türkiye will also suffer from “pneumonia” because the U.S. economy starts to “cough.”
“Every time the Fed raises interest rates, Türkiye loses a lot of investment capital and opportunities. Türkiye already has very serious problems finding funds and foreign resources … Investments within Türkiye are also going away slowly,” he said.