May 02, 2016
A NYT article on Donald Trump’s threats to impose high tariffs on Chinese imports discussed the possibility that Trump might seek rules that addressed policies aimed at currency management. The piece included the strange assertion that:
“A central problem is defining currency manipulation in a way that excludes the United States — in particular, the Federal Reserve’s post-recession stimulus campaign, which had the effect of weakening the dollar much in the same way that other countries do to their currency.”
Actually it is difficult to see the problem here. Currency management (“manipulation” is a peculiar term, since it is generally done in the open) involves buying another country’s bonds, the Fed’s quantitative easing program involved buying U.S. bonds. It’s not clear what the basis for confusion is.
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