Fed keeps focus on US economy as the world tilts toward a recession that it may be contributing to

The Fed has a mandate that keeps its focus on the U.S. AP Photo/Mark Lennihan

The U.S. Federal Reserve holds inordinate sway over the world’s economies – yet it acts, in some ways, like they don’t really matter.

Its power is primarily because of the dominance of the U.S. dollar, which soared in recent months as the Fed’s aggressive interest rate hikes made the greenback more attractive to investors. But this has a downside for other countries because it is fueling inflation, raising the cost of borrowing and increasing the risk of a global recession.