Macro Question?

Question

Do you think the Fed would welcome a noticeable decline (10%-15%) in the exchange value of the $ over the next 6 months?

Answer 1

Yes, the Fed would welcome this, though may not explicitly say so. Such a decline in $'s external value would help international competitiveness of US exports and would have a favourable effect on reducing imports and encouraging domestic production. This would ease Fed's need to raise interest rates and hurt domestic investment activity.