Report
Patrick Artus

What will the Federal Reserve and the ECB do if the US Treasury weakens the dollar?

Donald Trump is considering demanding the US Treasury to carry out currency interventions to weaken the dollar. In the United States, the Treasury has such a remit. If such a policy is implemented: What will the Federal Reserve do? If it is independent, it will raise its interest rates to combat imported inflation; What will the ECB do? If the dollar depreciates, and if the euro appreciates, it is likely that it will intervene (as an appreciation of the euro would push inflation to an even lower level), which may take the form of a (necessarily limited) rate cut or a resumption of quantitative easing.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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