Parker2112
11-13-2010, 12:01 AM
http://www.bloomberg.com/news/2010-11-12/obama-says-federal-reserve-s-easing-wasn-t-designed-to-impact-the-dollar.html
President Barack Obama (http://search.bloomberg.com/search?q=Barack%20Obama&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) said the U.S. Federal Reserve’s second round of quantitative easing is designed to boost growth, not affect the value of the dollar, rebuffing charges that America is seeking a weaker exchange rate.
“This decision was not one to have an impact on the currency, on the dollar,” Obama said a day after former Fed Chairman Alan Greenspan (http://search.bloomberg.com/search?q=Alan%20Greenspan&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) said the nation was “pursuing a policy of currency weakening” in a Financial Times opinion piece. “It was designed to grow the economy,” the president said.
Obama’s comments also contrast with criticism of the Fed’s step by officials in China, Germany and Brazil, who have said it will depress the value of the dollar. A weaker currency could help Obama achieve his goal of doubling U.S. exports in five years by boosting the competitiveness of overseas shipments.
The U.S. faces a “huge danger” from deflation, which would be damaging to the world economy, Obama told reporters today at the close of the Group of 20 summit in Seoul, where leaders agreed to move more toward market-set currencies. He said exchanges on the Fed’s actions weren’t “central to any of the discussions” between world leaders at the two-day summit.
Fed policy makers on Nov. 3 said they will buy an additional $600 billion of Treasuries to boost growth in the world’s biggest economy, a strategy known as quantitative easing. The Fed left unchanged its pledge to keep interest rates low for an “extended period.”
Deflation Concern
“There’s some legitimate concern that we’ve had very low inflation, that a huge danger in the United States is deflation,” said Obama. “We have to be mindful of those dangers going forward because that wouldn’t be good for the United States or for the rest of the world.”
Treasury Secretary Timothy F. Geithner (http://search.bloomberg.com/search?q=Timothy%20F.%20Geithner&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) said yesterday that Greenspan’s assessment on U.S. policy was incorrect. “That’s not an accurate description of either the Fed’s policies or our policies and again I don’t think it’s an accurate description of what’s happening in markets today,” Geithner said in an interview with CNBC television.
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, rose for a sixth day, the longest winning streak since June, to trade at 78.305.
President Barack Obama (http://search.bloomberg.com/search?q=Barack%20Obama&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) said the U.S. Federal Reserve’s second round of quantitative easing is designed to boost growth, not affect the value of the dollar, rebuffing charges that America is seeking a weaker exchange rate.
“This decision was not one to have an impact on the currency, on the dollar,” Obama said a day after former Fed Chairman Alan Greenspan (http://search.bloomberg.com/search?q=Alan%20Greenspan&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) said the nation was “pursuing a policy of currency weakening” in a Financial Times opinion piece. “It was designed to grow the economy,” the president said.
Obama’s comments also contrast with criticism of the Fed’s step by officials in China, Germany and Brazil, who have said it will depress the value of the dollar. A weaker currency could help Obama achieve his goal of doubling U.S. exports in five years by boosting the competitiveness of overseas shipments.
The U.S. faces a “huge danger” from deflation, which would be damaging to the world economy, Obama told reporters today at the close of the Group of 20 summit in Seoul, where leaders agreed to move more toward market-set currencies. He said exchanges on the Fed’s actions weren’t “central to any of the discussions” between world leaders at the two-day summit.
Fed policy makers on Nov. 3 said they will buy an additional $600 billion of Treasuries to boost growth in the world’s biggest economy, a strategy known as quantitative easing. The Fed left unchanged its pledge to keep interest rates low for an “extended period.”
Deflation Concern
“There’s some legitimate concern that we’ve had very low inflation, that a huge danger in the United States is deflation,” said Obama. “We have to be mindful of those dangers going forward because that wouldn’t be good for the United States or for the rest of the world.”
Treasury Secretary Timothy F. Geithner (http://search.bloomberg.com/search?q=Timothy%20F.%20Geithner&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) said yesterday that Greenspan’s assessment on U.S. policy was incorrect. “That’s not an accurate description of either the Fed’s policies or our policies and again I don’t think it’s an accurate description of what’s happening in markets today,” Geithner said in an interview with CNBC television.
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, rose for a sixth day, the longest winning streak since June, to trade at 78.305.