The Fed’s Vice Chairman warns about us about the strong dollar

Stanley Fischer (Vice Chairman of the Fed) gave us a warning in a speech on Nov 12. He’s someone we should list to.

Effect of rising US dollar on trade.

He reported that since July 2014 the US dollar has risen aprox 15% vs the currencies of our major trading partners, a “large, though not unprecedented” move. The Fed’s econometric model show that a 10% dollar rise reduces exports by 3% after one year and 7%+ after three years — and increases real imports by 4% after three years. The net effect on GDP: a decline of 0.7% after one year and 1.5% after three years (these numbers are roughly estimates). The bottom line…

Read my full report at Wolf Street.