I joined Charles Payne on Fox Business TV for a broad economic discussion today. Payne, like many, are concerned that the Fed continues to tighten and worries this is going to end the business cycle. He also argued that the strong dollar was a significant threat of US multinational earnings.
The Fed’s rate hikes, I think, do help underpin the dollar. However, given the strength of the US economy and the fact that real short-term interest rates, including the Fed funds and two-year note yield, is still negative (i.e., below the headline inflation rate), it is hard to say policy is tight. I suggested that nearly anyone else who is qualified to be Fed chair, including the past chairs (I somehow and inexplicably drop Bernanke from the list in a lapse on my part) would be doing that same thing.