Interview: U.S. monetary policy shifts heighten global economic risks, says Uzbek expert

TASHKENT, Oct. 28 (Xinhua) — U.S. monetary policy changes carry significant long-term economic risks worldwide, according to one sociologist.
“After the Fed lowers its rate, capital usually moves faster in search of higher returns,” said Azamat Seitov, head of the Laboratory of Anthropology and Conflictology at the Institute for Advanced International Studies of the University of World Economy and Diplomacy of Uzbekistan.
“This rapid movement of capital at the global level will contribute to increased price fluctuations in markets and heightened investment risks,” Seitov noted.
While he acknowledged that reduced Federal Reserve rates might boost dollar liquidity and have short-term global economic benefits, Seitov warned that focusing solely on immediate gains is shortsighted.
He said this could lead to heightened market volatility, rising inflation, and increased debt risks in developing economies in the medium to long term.
“Furthermore, lowering the rate reduces the relative attractiveness of dollar-denominated assets, which may lead to significant fluctuations in the dollar exchange rate against other major currencies,” the Uzbek expert noted.
Seitov said the Fed’s interest rate shifts cause cycles of “prosperity, crisis, and downturn” in the global economy.
With the U.S. presidential election under 10 days away, Seitov cautioned that “magical quick fix” strategies to boost public approval through inflation control and low unemployment could lead to a deep recession.
“This is a consequence of the global dominance of the dollar,” said the Uzbek scholar.
“They fail to notice that this dominance,” he continued, “whether through monetary policy, debt markets, global commodity pricing, or the spread of financial crises, can cause fluctuations in global financial markets and shift their economic problems onto other countries.” ■