Is a strong dollar good for the US?

  • Having a strong currency (US$ near parity with euro) is nice for the ego - looks good, feels good, but in reality it's a complicated mixed-blessing.
  • Structural (permanent-ish) currency shifts can cause problematic imbalances (e.g. if US$ stays strong, US exporters will suffer, US companies with big foreign earnings will suffer, and US trade deficit will balloon).
  • Also makes US monetary policy decisions harder, i.e. US growing nicely now so Fed should raise interest rates soon, but if they raise rates, dollar will strengthen further.
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