TOKYO - Naturally, US Federal Reserve officials act with the best interest of the American economy in mind. Yet the actions of US Fed Chairman Jerome Powell and his team are playing into China’s hands in unexpected and impactful ways.

Case in point: The outperformance of China’s sovereign bonds, which in August grabbed the top spot in global performance rankings.

The immediate explanation is a widening policy divergence between the Fed and the People’s Bank of China (PBOC). But between the lines are growing indications that the trajectory of Fed interest rates may be a short-term positive but a long-term negative.

Right now, the Fed’s war on inflation is sending the dollar soaring at the worst possible moment for economies from Latin America to Europe to Asia.

The yen's transcending 140 to the dollar for the first time since 1998 is the most recent ominous milestone. That follows the euro’s return to 20-year lows. This chaos isn’t confined to the top-three currencies, as evidenced by the Indian rupee about to hit 80 to the dollar.