However, to make effective policy, the Federal Reserve must have as full an understanding as possible of the factors determining economic growth, employment, and inflation in the U.S. economy, whether those influences originate at home or abroad.
Consequently, one direct effect of globalization on Federal Reserve operations has been to increase the time and attention that policymakers and staff must devote to following and understanding developments in other economies, in the world trading system, and in world capital markets.