The Federal Reserve is having a problem, giving low interest rates causes the economy to go into inflation. During this time, the U.S. dollar still continues to drop low against the euro. It seems like balancing the consumer and credit markets is the Fed’s priority, which will mean that cutting more rates. And once that is done, supporting the U.S. dollar will be less hard to do, said Yared. The Fed has already lowered rates to prevent the economy from going to a recession. People say that the rates are going to get lowered again.
Meanwhile the euro has rose up to $1.5380 dollars. The Fed is ready for the dollar to lower and inflation. The dollar has lowered against the major currencies, lowering about 102.66 yen. The dollar is obviously going to be lowered even more. The weaken dollar has sent a barrel of oil above $100. The price of oil is predicted to go up obviously if the dollar is going to be even weaker. Other prices of necessities will likely to be higher. A gallon of milk costs way more, as I heard that big packets of rice now costs 20 dollars. The prices will eventually get lowered when the dollar regains some bit of strength and when the economy isn’t doing so bad.
Soruce: http://www.forbes.com/currencies/2008/03/06/dollar-federalreserve-ratecut-markets-commodities-cx_ra_0306markets38.html
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