Fed’s Currency Swap Lines: A BIG deal for the Dollar

The Fed met this week on monetary policy. It was a bit of a snoozer. What wasn’t a snoozer, however, was what they’ve included in their recent monetary policy statements regarding currencies. Most market participants have been entranced by the Fed’s language about their target interest rates … Will they say they’ll keep rates low for an “extended period” or not? But the real story was buried in the last paragraph of the December Fed statement and reiterated in their latest statement. Here’s what it said … “The Federal Reserve will also be working with its central bank counterparties to close its temporary liquidity swap arrangements…