James Morrison, an associate professor of the London School of political science and economics, said in a video interview with Xinhua reporters a few days ago that the US Federal Reserve's interest rate hike will inevitably have a negative impact on the world economy. This is one of the difficulties caused by the US dollar's position in the international financial system to other economies and their policymakers. At the end of July, the Federal Reserve announced an interest rate increase of 75 basis points, which was its fourth interest rate increase this year and the second consecutive interest rate increase of 75 basis points, the largest concentrated interest rate increase since the early 1980s. (this is the Federal Reserve building photographed in Washington on June 22. Photo by Xinhua reporter Liu Jie) Morrison said that the inflation level in the United States has remained high for months. The continuous large interest rate hikes highlight the slow action of the Federal Reserve in the early stage. He believes that the measures taken by the United States to deal with inflation are "completely possible" to trigger a global economic recession, which depends on the path of the Federal Reserve's interest rate increase. "If the US economic growth slows down, the US demand for global goods and services will also drop. If the Federal Reserve raises interest rates, borrowing costs will rise, and other economies will find it more difficult to borrow and finance in the open market. In the long run, they will also face the risk of capital outflow." Morrison said. Morrison believes that US economic policy faces the challenge of how to balance. "In the past 10 years or so, the United States has injected a large amount of money into the economy. Now, the Federal Reserve is trying to gradually and forcefully curb inflation. If it moves too fast, the economy is at risk of recession; if it moves too slowly, high inflation will continue." He said. Morrison pointed out that developing countries are greatly affected by the changes in the US dollar. The rise of the US dollar exchange rate will make it difficult or even impossible for some developing countries to repay their debts denominated in US dollars. A stronger dollar may also lead to difficulties for some countries that rely on cheap imported goods, and the global trade pattern will also change accordingly. Morrison also mentioned that Europe is also affected by the Fed's interest rate hike. One of the impacts is that the exchange rate of the euro against the US dollar once fell below 1:1. "The more profound and practical impact of this exchange rate trend is that the trade and investment patterns between the United States and the European Union and between the United States and Europe and other countries will change." (news agency)