MILWAUKEE (Reuters) – The U.S.’s deepened trade and financial ties have exposed it to increasing “spillovers” that central bankers cannot ignore in setting policy, Fed vice chair Richard Clarida said in remarks to a conference in Europe.Economic shocks abroad can hit the U.S. directly by cutting demand for American-made exports, but are felt ever more deeply through financial and foreign exchange channels as well.

As long as world investors view the dollar as a safe haven, pushing its value up in times of crisis and driving down U.S. interest rates, the U.S. will have to pay attention, Clarida said.

“One hears a great deal about the spillovers of U.S. monetary policy to other economies. One hears somewhat less, though, about how global shocks affect the U.S. economy,” Clarida said at the Bank of France.

With open capital markets, the sum of U.S. assets and debts abroad have grown from around 25 percent of gross domestic product to 300 percent since 1960, Clarida said, a massive financial pool that can carry problems experienced in one country into the U.S.

“In today’s world U.S. policymakers can hardly ignore these risks,” Clarida said, even though their goal is to maintain the maximum level of employment consistent with stable inflation of around 2 percent a year.

In the decade since the 2007 to 2009 economic crisis, the Fed has navigated two disruptive overseas events, including concerns around 2011 that the euro currency area might break apart, and financial turmoil that hit China in 2015 and 2016. That latter episode in particular caused the Fed to delay expected interest rate increases.

The Fed is arguably in a third such epoch now, between the risks of a disruptive British exit from the European Union, a tense global trade environment, and a slowdown in Chinese growth.

“Three of our most recent FOMC statements have highlighted concerns about global economic and financial developments,” Clarida said. “In the presence of these risks and with inflation pressures muted, we can afford to be patient” in deciding any further rate moves.

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