With the US dollar at levels not seen since 2003 it has everyone scratching their heads wondering how can the economy be reflecting strength? Well, we should always remember markets look forward, anticipating the future. They are not always right of course, but historically following the markets is pretty accurate.
So, with a strong dollar one would assume less inflation is coming down the pipe, strong economic growth driven by high productivity. That is what I am seeing as potential for our economy, for the first time since those early years in the new millennium, just following a nasty recession and the 9/11 tragedy.
We all are a beneficiary of a stronger currency, which not long ago many were criticizing monetary policy by the Fed for trashing the buck. That may have occurred due to the limp policies from our politicians, but now that a new and aggressive administration has taken the reins perhaps we'll have a go at some fiscal policy to help the Fed pull back to a normalized monetary policy.
A stronger dollar may hamper exports but with better fiscal policy and job creation those concerns can be allayed as companies grow and strengthen.