Fed wields strong influence on global financial conditions -research

Financial Post | Aug 24, 2019 at 3:01 PM
  • The Federal Reserve’s influence on economic conditions beyond U.S. borders may be bigger than it thinks.
  • The research uses data on demand for Treasuries that would seem to refute Fed Chair Jerome Powell’s 2018 statement https://www.federalreserve.gov/newsevents/speech/powell20180508a.htm that “the role of U.S. monetary policy” in setting the global market conditions that can help or hurt economic growth “is often exaggerated”.
  • Demand for safe-haven dollar assets has grown since the 2008 financial crisis and will only gain steam, the paper’s authors conclude, despite frequent predictions that the greenback could lose ground to competing currencies.