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Mnuchin Grapples With the Strong-Dollar Dilemma Left by Rubin

  • Predecessors tried to move away from short-term strong dollar
  • Rubin championed the policy at a time of record weakness
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Mnuchin: Long-Term Strength of Dollar Important

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U.S. Treasury Secretary-nominee Steven Mnuchin has ventured down a well-trodden path in endorsing a strong dollar while actually preferring a weaker currency for now.

American policy makers need to maintain confidence in the dollar because of large and persistent savings shortfalls relative to spending -- though a super-strong dollar can hammer U.S. exporters and contribute to deflationary pressures. On the flip side, endorsing a weak-currency policy could spook the investors needed to fill the savings gap.