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Fed's Bullard says boost to dollar from interest rate hikes may ease

Economy Oct 15, 2022 03:10PM ET
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© Reuters. FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore October 8, 2018. REUTERS/Edgar Su/File Photo

WASHINGTON (Reuters) -The Federal Reserve's rapid interest rate increases have contributed to the strength of the dollar against other currencies, but that may ease once the U.S. central bank reaches the point of pausing the hikes, St. Louis Fed President James Bullard said on Saturday.

Fed policy "has produced a stronger currency," Bullard said at a monetary policy panel on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington. That may ease once the Fed gets rates to a place "where the committee thinks we're putting meaningful downward pressure on inflation," so rates don't need to continue rising, he said.

At that point, as other central banks adjust their policy, "you might see other movements in the dollar."

The impact of Fed policies on global financial markets has been a major theme of the IMF and World Bank meetings this week.

Bullard said that while the Fed's rapid rate moves this year, with its target policy rate rising from the near-zero level in March to the current 3.00%-3.25% range and heading higher, has touched off a global repricing of currencies, stocks, bonds and other assets.

But he said he regarded the amount of disruption as relatively low given the speed with which the Fed has lifted borrowing costs.

The Fed has raised rates "with relatively low turmoil in financial markets," Bullard said. "Not zero, but relatively low to what you might expect given the speed at which we've moved."

Fed's Bullard says boost to dollar from interest rate hikes may ease
 

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Comments (8)
Patron Silver
Patron Silver Oct 16, 2022 3:00PM ET
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down 30% is low turmoil?
nssskk nath
nssskk nath Oct 16, 2022 1:00PM ET
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FED hiked rates with high pace/speed not as planned earlier. So, FED may pause for a while now to verify the impact of it's own overaction.
Rakesh Oza
Rakesh Oza Oct 15, 2022 6:42PM ET
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US ECONOMY GOING TO DOWN LAST CATEGORY US ECONOMY
Angus Malarkey
Angus Malarkey Oct 15, 2022 5:52PM ET
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Strong dollar hurts exports further deepening existing recession. END THE FED.
Angus Malarkey
Angus Malarkey Oct 15, 2022 5:51PM ET
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Strong dollar is *******exports.
Tomek Mi
Tomek Mi Oct 15, 2022 5:27PM ET
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Sp ondicies will fly on monday
Alpha Omega
Alpha Omega Oct 15, 2022 4:18PM ET
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He is allowed by David to conduct business on Sabbath.?
Warren Wesley
Warren Wesley Oct 15, 2022 3:29PM ET
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fair assessments
 
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