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Obama Says Federal Reserve’s Easing Wasn’t Aimed at Affecting Dollar Value
Nicholas Johnston and Hans Nichols
Nov 12, 2010
President Barack Obama 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 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.
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