Has the off-shore dollar market in terms of dollar financing and currency hedging gotten so big that it can dictate Federal Reserve monetary policy including the expected short-term interest rate cut by the Fed at its July 2019 open market committee meeting? In other words, has the Federal Reserve lost its ability to conduct monetary policy and control interest rates as it sees fit and is now in search of other tools?

In this episode you’ll learn:

• Why the Federal Reserve is puzzled by how U.S. interest rates are behaving.
• How the large but opaque off-shore dollar lending and currency hedging market could be strengthening the dollar, slowing the global economy and pushing down interest rates.
• What is leading to a global dollar shortage.
• Why the Federal Reserve is researching other policy tools.
• What investors can do to protect against uncertainty regarding the dollar

Thanks to ButcherBox and Policygenius for sponsoring the episode.

For show notes and more information on this episode click here.

• [0:20] The suspected outcome of the Federal Reserve Committee Meeting on July 30th and 31st. 
• [3:04] Is the Federal Reserve’s inconsistency, in this case, something to fear?
• [6:31] The influence of offshore U.S. dollars on the Federal Reserve. 
• [9:10] The issue of undocumented offshore dollar-denominated debt. 
• [12:06] The ramifications of the inability of the global supply chain to access the dollars they need. 
• [15:21] Banks are less willing to lend dollars while also demanding more “pristine” collateral. 
• [18:36] The complexity of the global U.S. dollar matrix. 
• [21:06] Steps to take to cushion your portfolio against any ramifications of a lower Federal Reserve interest rate.

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