WSJ Fedwatcher Jon Hilsenrath writes about the consequences of the ECB quantitative easing announcement for the Fed and says it could delay rate hikes, although Fed officials have played down the consequences of the strong dollar so far.
Hilsenrath writes:
A stronger dollar has three important implications for the U.S. economy, markets and policy makers. First, it tamps down inflation just as the Fed is trying to raise inflation closer to 2%. Second, it hurts exports and therefore economic growth. Lastly, the attraction of U.S. financial assets could heat up markets just as regulators keep watch for dangerous asset bubbles.
He spoke with JPMorgan chief economist Bruce Kasman. He’s currently predicting a Fed hike in June but admitted he’s wavering because of the dollar and the latest downward pressure on inflation.
