““It’s hard to make a strong case” the Fed’s bond-buying program can now aid the economy through lowering rates, said Stephen Stanley, chief economist with Pierpont Securities. He said that leaves the Fed relying on the “secondary mechanisms” of monetary policy, most notably the trade benefits of a lower dollar. “They want to see [a dollar decline], although they’d never admit it publicly,” Stanley said.
More broadly, the Fed’s historic reluctance to comment on the dollar ignores a fundamental reality, says Tim Duy, an economics professor at the University of Oregon. Referring to the Fed/Treasury accord, he said “the idea there is this line” between the two authorities “is more of a policy construction than anything with real economic meaning.”” Read more.
“Central Bankers Give In, And Discuss the Dollar”
Michael S. Derby
Wall Street Journal, November 19, 2010.
Image by jscreationzs / FreeDigitalPhotos.net.
"The Biden administration threatens to invoke Section 4 of the Fourteenth Amendment to sidestep the… Read More
"There are so many holes in the FTC and Sony’s opposition to the Microsoft-Activision merger… Read More
"A wide range of outcomes are still possible for 2023, ranging from stagflation to a… Read More
"The real 'capitalist achievement,' however, isn’t Graceland. It’s the fact that compared to the stuff… Read More
"The unseen cause of gentrification is the knee-jerk NIMBYism of affluent leftist neighborhood associations. And… Read More
"Politicians on the left would like us to believe inflation is caused by greedy corporations.… Read More
"As 'dark horse' candidate, Ramaswamy has a greater burden of proof before the electorate.… Read More
"The US economy may continue to grow or shrink few percent from year to… Read More
*AIER is a 501(c)(3) Nonprofit registered in the US under EIN:04-2121305