The Federal Reserve's dovish stance on interest rates is increasing the risks of financial fallout from a rate hike in the future, Steven Wieting, Citi Private Bank's chief global investment strategist, said Wednesday.
Fed policymakers indicated in March they would raise rates fewer times than they previously planned, citing financial conditions in overseas markets among other things. The Federal Open Market Committee will deliver a decision on rates when it concludes a two-day meeting later Wednesday.
Wieting said the Fed is more focused on international developments than at any time since 1998, when it cut interest rates to prevent U.S. economic growth from stalling amid the Asian financial crisis. He said the U.S. central bank has drawn a direct line between rate policy and Chinese currency risk.