The Fed Needs to Tread Carefully With This Strange Dollar
Many economists — including Council of Economic Advisors Chair Stephen Miran — expected the buck to strengthen when President Donald Trump implemented tariffs. In an essay published last November, Miran wrote that the exchange rate was 'more likely than not' to appreciate alongside an improving trade balance, as it did during Trump's first trade war in 2018 and 2019. The so-called currency offset was critical to his view that the new duties wouldn't necessarily be passed through to consumers, at least not entirely. Treasury Secretary Scott Bessent made the same point during his confirmation hearings.
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