BANGKOK -- The U.S. Federal Reserve decided Sept. 17 to keep its key interest rate unchanged at near zero, but Chair Janet Yellen revealed that U.S central bankers' perception of the economy has changed. They are less confident on inflation and worried about how the global economy, especially China and other emerging markets, may affect the U.S.
Although the Fed's concerns were clear enough, what it intends to do is not. The outlook for emerging economies is bleaker than it was earlier this year. And the prolonged uncertainty over Fed policy will limit emerging markets' own monetary options: If they try to cut rates while the U.S. tightens, overseas capital may flee.