MHG

FOMC Meeting: Fed Talks Tough on Inflation

This Federal Reserve Board seems to have forgotten about open market operations to support the dollar to help keep oil prices low or, at least, to make oil prices less volatile than they now are. The nice thing about currency intervention to support the dollar is that other governments may decide to cooperate with our government, making the cost of conducting currency open market operations to the US taxpayer less than many other alternatives, such as raising interest rates, which adds to the amount of interest paid on the Federal debt. If foreign governments perceived that the Fed had a policy of defending the value of the dollar with open market operations, then there would be less pressure on the dollar from abroad to dump it. When is the Fed going to realize that support of the dollar via such operations is counter inflationary, especially if other governments cooperate? Why will they not use this tool? Can someone please explain?