Comments by Fed vice chair, Richard Clarida
- Fed is ensuring credit is flowing to the US economy
- Any talk of a rate increase is "a long way down the road"
- Confident that emergency measures can be scaled back at appropriate time
- We have the tools to keep the economy out of deflation
- Central bank needs discretion in a moment like this to respond to the crisis
When this is all said and done, expect the Fed measures to weigh on the US dollar for an extended period of time.
It could likely take the Fed a few years to scale back on their recent actions but when they do so in a meaningful way to set up rate hikes once again, we could potentially see a repeat of the 2013-15 period where the only trade was to buy the dollar.
But again, not before a likely protracted period of pain for the dollar once the global economy stabilises in the wake of an unprecedented amount of policies by the Fed.
