(March 18, 2016) Financial markets reacted to the outcome of the Federal Open Market Committee meeting on Wednesday, March 16, as if what the Fed had revealed was highly dovish, that is, diminishing expectations regarding future interest rates. Continue reading
(1/1/2016) My answers to three questions at the start of 2016 (from Chosun Ilbo, leading Korean newspaper): Continue reading
(3/23/2015) We are at the 30th anniversary of the 1985 Plaza Accord. It was the most dramatic intervention in the foreign exchange market since Nixon originally floated the US currency. At the end of February 1985 the dollar reached dizzying heights, which remain a record to this day. Then it began a long depreciation, encouraged by a shift in policy under the new Treasury Secretary, James Baker, and pushed down by G-5 foreign exchange intervention. People remember only the September 1985 meeting at the Plaza Hotel in New York City that ratified the policy shift; so celebrations of the 30th anniversary will wait until this coming fall.
The dollar has appreciated sharply over the last year, surpassing its ten-year high. Some are suggesting it may be time for a new Plaza, to bring the dollar down. In its on-line “Room for Debate,” the New York Times asked, “Will a strong dollar hurt the economy and should the Fed take action?” Here is my response: Continue reading