How far can the Fed flex its muscles?
One of the biggest themes in global markets over the past few months has been the strength of the US dollar. It's now trading at a 12-year high against the euro. Against a broad basket of other currencies, it's risen by around 25% since last summer.
That's a big move in historical terms. Just as last year's collapse in the oil price reshaped the outlook for the world economy, creating winners and losers, so too will the rise of the dollar.
The big driver of the strengthening dollar is the continuing economic recovery in the US and the fact that the Federal Reserve is likely to start raising interest rates in the next few months. Higher rates in the US make the dollar more attractive.
The biggest losers could well be found in emerging markets. In previous bouts of dollar strength, the economies and financial markets have tended to suffer.
The old driver used to be dollar-denominated government debt - a rising dollar increased the burden of this debt and made it harder to repay.
While borrowing in dollars by emerging market governments is now less common than it once was, the same cannot be said of private borrowing.
Last year the Bank for International Settlements (an international co-ordinating institution for central banks) warned of these risks.
Even if emerging market firms hadn't borrowed in dollars, the rising value of the US currency could still hit their economies.
As the returns available in the US rise, international capital could flow away from the emerging world and back towards North America.
Many emerging markets have officially, or unofficially, pegged their currencies to the greenback, so its rise drags up the value of their currencies and makes their exports less attractive.
Add in the collapse in commodity prices (many commodity exporters are emerging markets) and the potential for a messy outcome rises.
The Federal Reserve is America's central bank but it also plays a crucial role in the world economy. Monetary policy's impacts can spill over into other countries and nowhere is this case clearer than we looking at the Fed.
So should the Fed be taking into account other countries when setting rates and conducting policy?
In October last year Stanley Fischer, the vice chair of the Fed's board of governors and Janet Yellen's number two, addressed this very topic.
Fischer is a hugely distinguished macroeconomist - a former chief economist at the International Monetary Fund and the former head of an emerging market central bank (Israel, now often counted as a developed rather than emerging economy but still usually seen as emerging in Fischer's day).
If anyone is aware of the potential spill-overs from the Fed tightening its own policy, it's him.
In the speech he acknowledged the crucial global role of the Federal Reserve but emphasised that it was responsible to US politicians and for the health of the US economy.
To the extent that the impact of the Fed's actions on other countries would be considered when setting policy, it was simply in terms of how would a slowing of other countries hit the US.
He offered three reasons for optimism on how manageable a rise in US rates would be.
1.The Fed would make a great effort to make its policy intentions clear. Interest rises wouldn't come as bolt from the blue.
2.The Fed would not be raising rates at all until the US recovery was firmly entrenched.
3.Emerging markets were generally in a better shape than in the 1990s.
Despite all that though, he noted that "it could be that some more vulnerable economies… may find the road to normalisation [i.e. raising US interest rates back to more 'normal' levels] somewhat bumpier."
He then offered some advice to emerging market policymakers to "consider their own policy responses to the forthcoming normalisation in the United States and some other advanced economies".
In other words, he advised emerging markets, when setting their own policy, to bear in mind that US rates could rise.
Almost six months on from that speech, there are reasons to be less relaxed about both the first point and his advice to other central bankers.
The Fed has been very clear about its intention to raise interest rates, the problem is no-one (until recently) really seemed to believe them.
The members of the Fed's rate-setting committee regularly publish their own projections of where they think interest rates will be in the future.
The median estimate currently shows rates at 1% by next January and 2.5% by January 2017. Meanwhile, the futures market (which shows what the market assumes rates will be) sees US rates at around 0.5% next January and at around 1.5% a year later.
The markets have consistently believed that rate rises will be later and slower than the Fed has been signalling. If the markets now decide to actually take the Fed at its word, that could imply a disorderly process of market adjustment.
Fischer's advice to take into account the "normalisation" of US rates has not been widely followed. So far this year, central banks in emerging economies as diverse as Indonesia, India, Romania, Peru and Turkey have been cutting interest rates.
Against a backdrop of likely Fed rate hikes, that makes their currencies more vulnerable to a sell off.
There's a vein of thinking in international macroeconomics that the global monetary order is best maintained when one major player is prepared to act as leader, ensuring that the whole system functions.
As Fischer argued last year, there are those who argue that the "stability of the international financial system could best be supported by the leadership of a financial hegemon or a global central bank".
His message though was this: "I should be clear that the US Federal Reserve System is not that bank."
The Federal Reserve is the most important central bank in the world, its decisions have an impact in many countries. But when it comes to setting policy, it isn't the world's central bank, its America's.