As the globalization of the world's economies goes on, it will become natural for the monetary policies of one major country to affect the policies of others. After all, money flows across national borders.
The U.S. Federal Reserve on April 18 announced a 0.5 percentage point cut in short-term interest rates, a decision the stock market welcomed with an upward spike. But it must not be forgotten that the cuts were prompted by growing concern over a slowdown in the real economy.
The so-called Old Economy plunged into a recession around the end of last year, although signs of a comeback are emerging as companies moved ahead with inventory adjustments. A slump in the "New Economy" is also becoming noticeable as firms in the sector offer fewer jobs.