The United States economy looks set for a hard landing and that means tough times ahead for Asia, where the lessons of the financial crisis remain largely unlearned. George Worthington, International Financing Review's chief Asian-Pacific economist, said US monetary policy was still trailing inflationary pressures, despite last week's Federal Reserve decision to target a 50-basis-point rise in the federal funds rate. This latest move tightened US rates beyond where they were before the Asian financial crisis, when monetary policy was already quite stimulatory. The tardiness of the Fed's response meant it would be forced to raise rates more than it might have had it acted sooner. Mr Worthington predicted another 50-basis-point increase late next month and rises totalling as much as 150 basis points by the end of the year. 'A series of rapid rate rises looks likely, and that is going to make it very difficult [for the Fed] to pull the rabbit of a soft landing out of their hat.' 'I am expecting a hard landing - and that is going to have fairly negative implications for Asia as a whole.' The recession would be sharp but short, he predicted, given the US economy's strong fundamentals. Gross domestic product could drop by as much as 3 per cent over one or two quarters. Asia would then find it difficult to continue growing at its present pace. There had been hopes Japan would take over from the US as the market powering Asian growth, but that looked unlikely because concerns about employment and under-funded pensions meant Japanese consumers were holding on to their yen. Officials were compounding the problems, Mr Worthington said. Japan's monetary policy remained too tight, as demonstrated by the yen's strength and continuing declines in prices and wages. And fiscal policy was mired in political considerations which target spending to benefit core constituencies of the Liberal Democratic Party. In South Korea, meanwhile, the big four car makers were still boosting production, making more cars than they could sell profitably, in an effort to build market share. 'This is something they learned from the Japanese a while ago but have not unlearned yet, and I think it is quite dangerous for Korea as a whole,' Mr Worthington said. Elsewhere in the region, with the exceptions of Hong Kong and Singapore, the banking systems remained fragile, as governments hesitated to take the hard decisions needed to deal with non-performing loans. 'Lessons [of the financial crisis] have not been learned, and that is the dark side of the US hard landing. It is going to put pressure on these economies.'