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The Federal Reserve's Actions Act With a Long and Variable Lag
The Federal Reserve is the highest rates pretty much in town when it comes to develop markets Obviously emerging markets like Brazil have you know in the teen rates double digit interest rates. The dollar has hiked faster and more than anyone else? So all of these spreads are currently negative, which means that if you have a choice between holding your overnight money and dollars on the one hand and let's say Euros on the other hand that every time the fed hikes, then you're gonna move some money from euros into dollars. Not everybody can take advantage of that not everybody's in a position to choose between dollars or euros but enough people are That represents a pretty sizable flow. When that happens the exchange rate falls