US: Warsh's Fed Strategy May Weaken Dollar
Warsh's approach may hurt US dollar over time
S. dollar over time, according to Commerzbank. Warsh suggested markets can tighten financial conditions through higher long-term bond yields, reducing the need for Fed rate hikes. Commerzbank warns this risks damaging the Fed's credibility if inflation stays above target without decisive action.
If investors lose confidence in the Fed's commitment to fighting inflation, the dollar could come under pressure. 014.