Fed wants the best of both worlds. They need to raise rates to taper the bubble before it pops, but want to avoid the negative consequences of dollar appreciation (this would exacerbate deflation and economic contraction).
It's a tricky move. If they get what they want, they raise rates and the euro goes up to a calculated cost/performance equilibrium. It's a contradiction, but they have the means to engineer it. Might not all happen in one day though.
It's a tricky move. If they get what they want, they raise rates and the euro goes up to a calculated cost/performance equilibrium. It's a contradiction, but they have the means to engineer it. Might not all happen in one day though.