Lok Sang Ho

Five Ways the Global Economy Is Rebounding

The strength of the US dollar is bad for American exports. Last year, the weak US dollar helped make exports the bright spot of the economy. The new-found strength, in part reflecting flight to the most liquid and accepted international means of settlement, and in part reflecting the unwinding of positions taken by hedge funds, actually hurts American exports when the wealth effect is undercutting American consumption. The Fed should quickly reduce interest rates and attempt to soften the appreciation of the US dollar. In any case, today the world needs lower lending rates, the sooner the better. Too much is at stake.