“What does seem likely is that the impact of Fed tightening will be more severe for vulnerable emerging economies with high public and private debt,” the report said, calling a debt crisis a “very real possibility” for developing countries.
Top economist Nouriel Roubini warned on Monday there are signs that a debt crisis has already started, and a hard landing of the economy before the end of the year is now the baseline scenario.
Noble laureate Paul Krugman has also warned that the Fed’s rate hikes could have an outsized effect on the global economy.
