Powell Channeling His Inner Volcker Risks Pushing Dollar Higher

  • ICE Dollar Index is still a third below record high in 1985
  • Most central bankers like to be compared to Volcker: Westpac

Jerome Powell

Photographer: Ting Shen/Bloomberg
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The dollar could rally a lot further if Federal Reserve Chair Jerome Powell really is determined to channel a much-admired inflation-busting predecessor, Paul Volcker.

While the Bloomberg Dollar Spot Index climbed to a record Tuesday, Intercontinental Exchange Inc.’s gauge of the greenback was around a third lower than its 1985 all-time high, at the latter stages of Volcker’s tenure. The Fed’s own index of the US currency’s real-effective exchange rate was about 11% off its March peak that year.