Fed officials have a nuanced understanding of the dollar. On one hand, the share of exports in the US economy are less than half of Germany's for example, and much of what the US imports is invoiced in dollars, the greenback's exchange rate is not often a particularly important variable in the policy-makingequation.
On the other hand, Fed officials argue that impact of the dollar's rise is transitory. By that, officials direct investors' attention to the rate of change. The economic is largely driven by the pace of change, not the level. The level may not be transitory, but the rate of change is unlikely to be sustained.
That means the impact on prices and exports will moderate in time. For example, in the nine-month stretch from mid-2014 through Q1 2015, the nominal trade-weighted dollar appreciated by 19%. The impact may still linger then in Q1 16, but then it should fade. Since last March, the dollar has risen almost 5.5%, which is not nearly as riveting.
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