Fed gives tacit nod to strong U.S. dollar on back of rate hikes

Published by
Kyodo News

U.S. Federal Reserve Chairman Jerome Powell gave tacit approval Thursday for a stronger U.S. dollar as a result of increased interest rates to tackle decades-high inflation. Asked about the economy’s response to the Fed’s normalization of monetary policy after keeping rates at near-zero during the coronavirus pandemic, Powell told a congressional hearing that the channels could include the exchange rate, which has “disinflation effects.” The Japanese yen has continued to decline rapidly against the dollar, with the U.S. central bank expected to continue rate hikes to bring prices under control…

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