WASHINGTON, Oct 15 (Reuters) – The Federal Reserve’s rapid interest rate increases have contributed to the strength of the dollar against other currencies, but that may ease once the U.S. central bank reaches the point of pausing the hikes, St. Louis Fed President James Bullard said on Saturday.
Fed policy “has produced a stronger currency,” Bullard said at a monetary policy panel on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington. That may ease once the Fed gets rates to a place “where the committee thinks we’re putting meaningful downward pressure on inflation,” so rates don’t need to continue rising, he said.
At that point, as other central banks adjust their policy, “you might see other movements in the dollar.”
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The impact of Fed policies on global financial markets has been a major theme of the IMF and World Bank meetings…
