Macro Musings with David Beckworth cover image

Brad Setser on Addressing the Global Dollar Shortage and COVID-19’s Implications for Worldwide Trade Imbalances

Macro Musings with David Beckworth

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Is There a Correlation Between Dollar Funding Stress and the Global Economy?

There has been a correlation between indicators of dollar funding stress and the dollar. The Fed did go into the pandemic with standing swap lines with a narrow set of advanced economy central banks. I don't think that was terribly controversial because these countries had already qualified once. In most cases, they have strong political relationships with the Federal Reserve.

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