Everyone’s watching the dollar

  United States currency policy concerns almost everyone: the Chinese, who hold some $876 billion in US treasury bills; the Middle East and North Africa, where nearly every nation’s currency is pegged to the dollar; and financial markets the world over. But only one of these concerned parties from around the globe is actually responsible for setting US currency policy: The US Federal Reserve (Fed). Lately there has been speculation in global markets that a hike in the Fed funds rate is imminent — talk from which the Fed itself is remaining aloof.  “The Federal Reserve Bank extended the low borrowing costs period after looking at the state of the economy and the [9.7 percent] unemployment rate,” said the chairman of the Federal Reserve Bank of Chicago, Charles Evans, to Executive at the 2010 Summit on Financial Literacy & Education in Chicago, Illinois, hosted by Visa. Fed funds rate and