>> Andy Kornevian has a small shop in Jakarta, Indonesia which sells collectible action figures.>> It began as a hobby. Because of the hobby, I opened the store.>> This year has been tough for Kornevian's business. That's because a world away in Washington, the US Federal Reserve has been steadily raising interest rates.
And as a result, in October, the US dollar surged while Indonesia's Rupiah fell to its lowest level since the 1998 Asian Financial Crisis. Suddenly Kornevian's cost of importing toys from Hong Kong in the US shot up and profit margins plunged. Reuters Fed Correspondent Jonathan Spicer says, when the fed taps the breaks from the world biggest economy it can have an outsides reaction around the globe.
>> Really as it shifted away with interest rate hikes and with last bonds on it's balance sheet. The effects around the world have been immediate and painful for people. We have seen currencies hit in emerging markets and elsewhere. We've seen stock markets fall. It's led to building projects being cancelled, bankruptcies, job losses.
>> But now the Fed is gradually shedding hundreds of billions dollars worth of assets it had snapped up over the last decade. And hitting its stride with quarterly rate hikes. While that has not yet squeezed the US economy the reaction in financial markets as hit Argentina already mired in a deep recession.
Fueled by a severe drought and high inflation. The peso has dropped about 50% against the dollar this year alone. Leaving workers at this Argentine factory fretting about who the boss will fire to make up for higher costs of imported goods used to assemble light switches.>>
> Some analysts worry about America's massive influence on global financial markets.>> This doesn't rub everyone the right way, of course, that a central bank that's not elected in a country on the other side of the planet could have so much influence on their currencies, on their stock markets.
>> The Fed is expected to lift rates by another quarter percentage point on December 19th. Which means around the world governments, businesses, and people like Corny Arwin may need to prepare for yet more fallout.