Hedge Funds at Risk as Fed Dollar Focus Threatens Bull Bets
- Brainard likens greenback gains to 200 basis points of hikes
- Currency has risen 20% since 2014 using broadest Fed index
This article is for subscribers only.
Dollar bulls beware: The greenback is very much on the Federal Reserve’s radar.
While the currency has dropped against the euro and yen in 2016, it’s barely declined judging by the Fed’s broadest measure of the dollar versus U.S. trading partners. By that index, it’s up 20 percent since the start of 2014. Governor Lael Brainard, in the last comments before the quiet period leading up to Wednesday’s policy decision, said the greenback’s rally may be having the same economic impact as raising the federal funds rate by about two percentage points.