How Does the Fed Affect the World Economy?

The US Federal Reserve is a de facto central bank for the entire world. The dollar is the sort of de facto world money, it's the currency in which many transactions all over the world are denominated. If the Fed raises interest rates, other central banks are compelled to follow if they don't want to see money flow out of their economy and into the United States. And so there's a cumulative tightening cycle, which the US has helped to kick off.