I really doubt this dollar strength is gonna stay for long. It is bad for US exports but since the US doesn't export much, that's no major issue.
The main issue is that the US has an inflation target of above 2% and currently has a strong leaning toward deflation. So hence if you have a strong dollar, you have weaker inflation so the FED will be aiming to weaking the dollar and get inflation higher. They must secretly know about QE4 (its already been hinted at) so I guess it must be coming within a year or so but even if it doesn't, we will not see higher rates for many years.
You can't fight the FED.
|