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Will the mighty dollar prevent an inflation soft landing?

The Federal Reserve and other central banks are trying to pull off that trickiest maneuver of all, a soft landing that will allow them to bring inflation back down to earth without plunging the economy into recession. The danger? That instead they will fall on the hard concrete of a rising dollar.

The phenomenal appreciation of the dollar over the past few months is the biggest business and economic story that is almost nowhere to be found in the business and business press except for that newspaper’s editorial column. From its lowest level in the past 12 months, the greenback has appreciated nearly 20% against the Japanese yen to a 20-year high and 13% against the euro to a two-year high. The dollar has risen to about $1.08 per euro from $1.22 about a year ago, and “parity” is beginning to appear in some discussions.

https://www.wsj.com/articles/dollar-appreciation-exchange-rate-powell-interest-rates-soft-landing-inflation-federal-reserve-recession-japan-yen-euro-11650575367 Will the mighty dollar prevent an inflation soft landing?

Ethan Gach

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