The Fed’s decision to put an end to its zero interest rate policy by hiking rate to 0.25 percent has marked the beginning of the 21st century for world finance. Sure the 2008 crisis did take place in the 21st century, yet the ambivalent reality of today that shows both the mutation of the world economy and the irresistible rise in power of emerging economies corresponds more to what should be going on throughout the century.
The 21st century may indeed become the “Asian century” imagined by Beijing. The Fed’s decision may also temporarily slow China’s long march toward its “new normal” but it will also accompany the United States’ rebalance to Asia and the Pacific, to the detriment of Europe and the Middle East. The Fed’s decision confirmed the end of an 8-year crisis management and brought new perspectives to a century that just started.