-
Dollar May Be Less Important for Fed
Investors and policymakers continue to wrestle with the economic impact of the dollar's rise. The Federal Reserve has argued that the dollar's appreciation acts as a headwind on exports and dampens imported inflation. At the same time, despite the dollar's appreciation and the fall in oil prices, core inflation rose steadily last year. Core CPI rose from 1.6% at the end of 2014 to 2.1% at the end of 2015. The core PCE deflator lagged, but the after bottoming last July below 1.26%, it finished the year near 1.41%. Fed officials have a nuanced understanding of the dollar. On one hand, the share of exports in the US ... (full story)