The US dollar's rally is indisputable. Even the perma-dollar bears have been silenced. However, judging from various media reports, the risk is in the other direction now. Many seem to be exaggerating the dollar's rise. It is true on a bilateral basis the dollar is at multi-year highs. That is important for individual exposures. But to understand the impact on the US economy or on policy, nominal bilateral exchange rates are not sufficient. What is needed is a broader measure and one adjusted for inflation. The Federal Reserve tracks precisely this in its real (adjusted for inflation) broad (comprehensive) ... (full story)