How US Fed is unintentionally squeezing developing economies

Tourists and Turkish people queue outside a luxury goods store at an upscale neighborhood of Istanbul, Tuesday, to snap up bargains after Turkish lira sinks to a record low. The decline of the Turkish lira offers shoppers the advantage of purchasing luxury items at cheaper prices. The Turkish lira has nosedived in value in the past week over concerns about Turkey's President Recep Tayyip Erdogan's economic policies.

 Lefteris Pitarakis - The Associated Press
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WASHINGTON — President Recep Tayyip Erdogan is blaming the United States for Turkey's financial crisis, ignoring homegrown problems like high debts, raging inflation and his own erratic policies.

Yet one of the threats facing Turkey and other emerging-market countries really is made-in-America: By ratcheting up U.S. interest rates, the Federal Reserve has — unintentionally — led investors to pull money out of emerging markets like Turkey, strengthened the dollar's value and made it harder for foreign companies to repay their dollar-denominated debts.

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