Kevin Warsh’s early days at the helm of the Federal Reserve are a tough reminder that when it comes to currencies, the US central bank isn’t always going to act with the best interests of international markets.
Warsh is signaling he will be firmly focused on controlling inflation. The Fed chief was far more hawkish than anticipated in presiding over his first policy meeting, and officials are leaning toward an interest-rate hike this year. That was a surprise because Warsh had presented himself, prior to taking office last month, as sympathetic to US President Donald Trump’s wish for easier money. The dollar surged in response and looks set for a period of relative strength. That is precisely what beleaguered Asian currencies don’t need.
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