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Barkin: Fed Must Consider Global Developments But Focus Is US

FED
  • This follows growing Fed commentary on global spillovers, most recently and extensively VC Brainard's speech Friday on the lagged and potentially amplified effects of tightening on both US and global conditions (noted further here).
  • Adds when speaking to reporters: *BARKIN: HAVE TO WATCH POTENTIAL INTERNATIONAL IMPACT FROM USD - bbg
  • BARKIN: STRONG USD HELPS REDUCE INFLATION, EASES EXPORT DEMAND – bbg, with this impact noted in today’s S&P Global US PMI
  • This renewed focus on USD strength and a large rally in Tsy yields has seen the DXY index down 2.5% from its Aug 28 peak but is otherwise still up 17% YTD and at levels last seen in 2002.

DXY indexSource: Bloomberg

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