Moreover, countries that peg their currencies to the dollar (or otherwise shadow US monetary policy) effectively adopt the US policy stance. When many countries do this, the US monetary stance effectively becomes the prevailing stance in a large part of the world. This can lead to global monetary conditions that are either to easy or too tight for the world economy.
After reducing the short-term policy interest rate from 6 percent in 1990 to 0.5 percent in 1995, the Bank decided to push it down to virtually zero by providing ample liquidity in the market. This policy was unprecedented in the history of central banking.