According to Federal Reserve Chairwoman Janet Yellen, a strong dollar is a reflection of the strength of the US economy, but it also damps the nation's exports and inflation.
“Export growth has weakened. Probably the strong dollar is one reason for that,” Ms. Yellen said at a news conference in Washington on Wednesday. “On the other hand, the strength of the dollar also in part reflects the strength of the U.S. economy.”
A strong dollar also “is holding down import prices and, at least on a transitory basis, at this point pushing inflation down,” she said.
In updated economic projections issued on Wednesday, the US central bank downgraded their estimates for U.S. economic
growth and inflationfor 2015, The Wall Street Journal reports.
Ms. Yellen said gross domestic product, the broadest measure of output across the economy, has seen growth slow somewhat in the first quarter, “below where it was the last several quarters of last year.”
She also said, “We do see considerable underlying strength in the U.S. economy and in spite of what looks like a weaker first quarter, we are projecting good performance for the economy.”
