The fragmenting of free trade around the world and the rise of industrial policy have resulted in the nascent formation of a trade, finance and currency bloc organized around American economic and security interests. Although not formalized, the democracies in the West and their primary trading ... READ MORE >
U.S. dollar
American outperformance in the global economy
One of the more underdiscussed economic developments following the shocks of the pandemic has been the outperformance of the United States economy compared with its G-7 peers. Over the past eight quarters, the American economy has grown at a 2.9% annualized pace and is on track to grow at or above ... READ MORE >
Why a strong dollar is in America’s best interests
A strong dollar is good for the American economy. Not only does a strong dollar mean that there is a healthy demand for American-made goods and services, but, perhaps more important, it’s also a show of confidence in the U.S. government and financial institutions. Like any asset, the dollar’s value ... READ MORE >
Intervening in foreign exchange markets: The poverty of dollar devaluation
The United States has become a magnet for global capital as investors flock to its resilient economy because of interest rate and growth differentials between the U.S. and its major trading partners and a structural budget deficit featuring robust spending on infrastructure, supply chain resilience and ... READ MORE >
U.S. economic outlook: Expansion continues into 2024
Solid consumer spending driven by real personal income gains and sustained private investment will underscore a steady pace of growth at or near the 1.8% long-run rate in the United States in 2024. We expect that policy tailwinds from both the fiscal and monetary authorities will set the stage for ... READ MORE >
Dollar ascendant? Why the dollar’s dominance will not fade.
Following a decade-long rise in the dollar’s value, declarations of its end as the world’s reserve currency are in vogue. With the days of zero interest rates giving way to higher rates, elevated inflation and rapidly changing rules of trade, is there anything to this talk? Our answer is ... READ MORE >
Why the dollar remains the world’s reserve currency, and will stay that way
Recent talk that China, India and Russia are settling purchases of oil in non-dollar denominations has generated speculation that the dollar’s days as the world’s reserve currency are ending. This is nothing new. There were similar discussion during the financial crisis 15 years ago and, ... READ MORE >
As turmoil grows, foreign banks and investors flock to the dollar
Intensifying financial stress and increased volatility have shaken global markets and stimulated a move of capital into the safety of the American dollar. Whether it is the purchase of short-term Treasury notes, the depositing of cash in U.S. financial institutions or a greater use of the Federal ... READ MORE >
As the U.S. dollar surges, the potential for a currency crisis grows
The liquidity crunch driving the withdrawal of bond purchases by global central banks is creating the conditions of a classic policy quandary that is stoking international financial instability. The challenge in balancing growth, inflation and financial stability is now being exacerbated by ... READ MORE >
Japan intervenes in the currency market
With the yen in freefall, Japan on Thursday took the unusual step of intervening in currency markets to prop up the yen's value. For the first time in 24 years, the government began selling dollars to buy yen. The move came soon after the Bank of Japan held its policy rate at sub-zero levels, bucking ... READ MORE >