Part 8/11:
The global repercussions of a U.S. slowdown are particularly significant for Asia. A stronger U.S. dollar, often accompanying higher interest rates, would weaken Asian currencies and potentially trigger inflationary pressures across the region. Central banks in Asia might respond by raising interest rates further and dipping into foreign reserves to defend their currencies, adding to the economic strains.
The interconnectedness of U.S. economic health and Asian markets means that any instability in the U.S. can cascade into a broader regional downturn. Asian economies remain highly sensitive to shifts in U.S. monetary policy, exchange rates, and investor sentiment.