The Vice Chairman of the Federal Reserve, Richard Clarida, said on Friday that they do not target dollar levels, but added that they are not oblivious to the effects that the dollar can have on inflation, as reported by Reuters.
Additional conclusions
“Headlines on the dollar often overlook what happened in the previous 3-4 years.”
“The level of the dollar is now just a little below its average level of the last 5 years, it is not something that worries me.”
“Inflation used to be more evenly distributed across all categories of goods and services.”
“Inflation for goods production has been low, but inflation for services has come closer to our target since the 1990s.”
“There is going to be enough demand in the economy this year, but not enough to justify a policy change.”
“I have not yet made a decision on how many scars there will be.”
“Fed staff are closely monitoring sectoral effects on the labor market.”
“I see the GDP level for February sometime in the second half of this year.”
“It is a little more murky to know when we will recover lost growth.”
Market reaction
These comments were largely ignored by market participants. At the time of writing, the US dollar index it was up 0.05% on the day at 89.86.
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