According to the World Bank report published in Wednesday's Financial Times, swift interest rate hikes targeted at containing inflation in product and asset prices could lead to another recession in US and European countries, economies of which are recovering slowly. 

Robert Zoellick, World Bank President, stated in the reported "Waiting for bubbles to burst and then cleaning up the aftermath is now a new lesson of what not to do." However, he considers, interest rates, tightened too edgily could cause another downturn, especially in the countries that shows weak recovery signs.

Zoellick also noted Australia's central bank had already raised interest rates, which may put Asian countries with close links to Australia's economy under pressure to follow suit. However, such actions in time when Fed keeps its rates close to zero would cause Asian currencies to appreciate. This would make their exports more expensive and decrease overseas sales, hurting recoveries based on exports.

He also added there was also competition from China. Chinese goods getting cheaper to buy than those of Asian rivals as yuan is tied a declining dollar.