Remarks from former Federal Reserve Chair Janet Yellen on currency manipulation pre-empted the US request China do so with the RMB.
Overnight ICYMI:
- US said to press for stable Yuan as China trade talks resume
- USD moves lower. If yuan can't fall (it has to rise), and the USD needs to fall
If you check out those links and are incredulous, can't say I blame you. But yep, there you go.
Anyway, back to Yellen. She spoke on a Brookings Institution podcast Tuesday. Her remarks were not specifically on the US manipulation request, but are appropriate to consider.
- some tools used by central banks to help steady their economies can also weaken their currency
- "Monetary policy does have a systematic effect on a country's exchange rate and nevertheless I think that it's widely agreed that it should be available to be used for domestic purposes,"
- "So we would want to be careful not to define domestic policy tools as currency manipulation."
