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Fed's strategy shift to bind big central banks from Frankfurt to Tokyo

The U.S. Federal Reserve’s landmark shift to a more tolerant stance on inflation will be a drag on the dollar for years and will raise hard questions about the role of central banking, challenging policymakers from Frankfurt to Tokyo.

Such a reinterpretation of the Fed’s mandate could be seen as a foray into social policy, a vital precedent for others as they reexamine their own roles after years of unconventional moves that already impact wealth and income distribution.

The second, more immediate concern will be the dollar's weakness, which hurts exporters from Europe to Asia.


  • I have a couple of thoughts:

    Deflation scares them to death.

    And, we're all mercantilists after China stopped exporting critical items during the early stages of the COVID crisis.
  • ... and One Ring to Bind Them All ?
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