Apart from the economic implications, there's also a worrying side effect with the schizophrenia surrounding the direction of US interest rates - it is that of fund flows. Through the so-called carry trades, almost-zero interest rates in the US had lured global fund managers to borrow USD and buy into emerging market bonds. That trade hasn't work because EM currencies tanked. These fund managers are now even more likely to take their money out at the prospects of higher funding costs.