Next Wednesday, at 2:00 PM ET, economists across the globe will be huddled in front of their screens searching through the Fed’s latest communication for answers to a wide variety of questions. Did the Fed hike interest rates by 25 basis points as expected? Did the dot-plot still suggest one more hike later this year? How close is the Fed in starting to reduce the size of its balance sheet?
It’s all very exciting. But for global growth sentiment, and by extension commodity prices and potentially even equity movements, it won’t make much difference if the Fed hikes one or two more times this year, or starts its balance sheet reduction in September or December. From those perspectives policy tightening elsewhere in the world, particularly China, could be much more important.