Although they may serve U.S. interests, sudden changes in Federal Reserve policies—such as the “taper,” or paring back purchases of U.S. treasuries and mortgage-backed securities—can throw developing-world economies into a tailspin, asserts Steil, CFR director of international economics. “Changes in U.S. monetary policy can therefore have immediate and significant global effects, expanding or constricting the flow of capital into and out of developing nations and whipsawing the value of their currencies against the dollar, which can in turn dramatically alter local inflation rates and export volumes.” Steil writes that the Fed will continue to focus on strengthening the U.S. economy, even if it hurts the economies of other countries. “But if Washington can’t lead, it should at least get out of the way by abjuring calls to apply anti—currency-manipulation measures against countries taking legitimate steps to bolster their defenses against future Fed-induced

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