A surging U.S. dollar is already sending ‘danger signals,’ economists warn
The Federal Reserve’s aggressive efforts to wring out inflation have sent the U.S. dollar soaring to historic highs — further aiding the effort to get price pressures under control. Beware, however, the potential for unwanted side effects, a pair of economists warned in a new paper.
“The Federal Reserve has been among the most aggressive (if not early) tighteners, and the dollar has appreciated sharply since mid-2021. Determined disinflation by the Fed and continued appreciation of the dollar could lead to more intense debt troubles for a range of EMDEs (emerging market and developing economies).”
“Indeed, danger signals are flashing already.”
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