The dollar’s rally matters

It still won’t help Fed’s Warsh win the inflation fight
A strong dollar is doing far less for the fight against inflation than might be expected

US dollar bills with a blurred background showing a green and red stock market graph.
The Federal Reserve’s last line of defense against inflation may not hold.

A stronger U.S. dollar is providing less help than expected to Federal Reserve Chair Kevin Warsh in his fight against inflation.

Economists say a strong dollar does less for U.S. inflation because imported goods represent a low percentage of domestic production costs.

Soaring energy prices have prompted traders to boost their bets on a Federal Reserve interest-rate hike later this week to nearly 40%.

New Federal Reserve Chair Kevin Warsh hasn’t been getting much help from the dollar since his vow in June to get inflation back down to the U.S. central bank’s 2% target.