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What US Fed does today, world central banks need not do tomorrow

The trend of central banks following their American counterpart's lead is not always certain

Federal Reserve Chair Jerome Powell
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Jerome Powell (Photo: Bloomberg)

BS Reporter New Delhi

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Do central banks still continue to follow the Federal Reserve’s (Fed) actions? The issue becomes critical ahead of the US central bank's meeting in September amid speculation of a rate cut. A study by SBI Research in India has it that central banks in rate-hike cycles are synchronised across countries but not during rate cut cycles.

Historical data shows that the Fed rate cut cycle during the global financial crisis led central banks in emerging markets to follow suit but the timing has been different. While some countries like Brazil had started cutting the rates prior to

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