September 15, 2015
In this piece, Samson’s CIO Jonathan Lewis discusses Fed Tightening and the US Dollar. Bulletin Highlights:
- The next FOMC announcement will take place on September 17th and the possibility of an increase in the Fed Funds rate and the ramifications for the US dollar are the subject of much speculation. What can historical periods of Fed tightening tell us about the reaction of the US dollar to such an action?.
- There is little correlation between Fed tightening and the US dollar and so the historical context of such periods is important. In certain cases, Fed tightening may plant the seeds of a dollar sell-off. The 1997 tightening period is particularly instructive in today’s environment.