These are the countries that are going to get hit hardest if the Fed hikes rates

The Federal Reserve makes a momentous decision on Thursday, and it may finally raise US interest rates for the first time since the financial crisis.

That’s not just big news for the United States. It’s big news for economies around the world, and the dollar has more influence than any other currency globally. Some emerging markets are going to be particularly nervous as Fed chair Janet Yellen steps up to speak.

When the Fed hikes rates, investments in the US tend to yield more. As a result, the dollar strengthens against other currencies, because investors need dollars to make those US investments.

That’s not too big of a deal if you have a dollar income and dollar-denominated debt. But if you have another currency income and dollar-denominated debt, you’ll feel the squeeze. Your income will effectively be falling against the value of your debt, even if neither changes in nominal value.

Some countries are more exposed to that risk than others. Analysts at Fathom have tried to rank them based on where interest rates are in each country, their debt levels, how much of it is denominated in dollars, and how dollar-reliant their economies are.

Here’s the chart:

Many of the countries are no surprise — Mexico, Russia, Ukraine and Venezuela being in the top 10 won’t shock many people.

Others are more worrying. The fact that Brazil, one of the largest economies in the world, comes in second place is a genuine concern. The Fed’s mandate is understandably focused on the US economy, but what happens in Washington tomorrow won’t stay in Washington.

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