Fed's March Policy Message May Be Crimped by Muscular ECB Move

Thu, March 10, 2016


Dramatic action by the European Central Bank is raising questions about how far the Federal Reserve can diverge from its peers.

U.S. central bankers meet next week and while investors foresee almost no chance of an interest rate increase, how the Fed shapes expectations about its next move will be the big story when the meeting concludes on March 16.

...“Sustained exchange rate movements do affect the geography of production over time,” said Lou Crandall, chief economist at Wrightson ICAP LLC, and that can have a “disproportionate influence on U.S. manufacturing.”