Over the past three decades, the Fed's rate hikes have reduced US employment and output far more than anticipated, while causing "collateral" damage across the world. In the early 1980s, Paul Volcker, then Fed chief, resorted to harsh tightening that devastated US households. In Latin America, it resulted in a "lost decade".

Later, former Fed chief Alan Greenspan's rate hikes undermined the struggling savings and loans associations, forcing Washington and US state governments to bail out insolvent institutions. In the early 1990s, Greenspan again seized tightening but then reversed his decision, which undermined expansion. In the first case, global growth decelerated to less than 1 percent; in the second, it plunged to 4 percent below zero in developing nations.

In the 2004 to 2007 period, the rate hikes by Greenspan and his successor Ben Bernanke contributed to the Great Recession across the world. In low-income economies, growth stayed at 5 to 7 percent thanks to China's contribution to global growth.

After traditional monetary policies were exhausted, the central banks of advanced economies opted for new rounds of quantitative easing, driving "hot money" - short-term portfolio flows - into high-yield emerging markets, which had to cope with asset bubbles, elevated inflation and exchange rate appreciation.

Now US hikes will attract "hot money" outflows from emerging markets that are struggling with asset shrinkages, deflation and depreciation. In 2015, net capital flows for emerging economies will be negative for the first time since 1988.

Today, the world economy is more fragile than ever. It does not need unilateral actions with global consequences but without international accountability. What the multipolar world needs is truly global monetary cooperation.

The author is the research director of international business at the India, China and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and at EU Centre (Singapore).