Long Dollar, Long Interest Rates: Does The Stanley Fischer Trade Still Make Sense?

In a new report, Credit Suisse analyst Bill Papadakis discusses the outlook for what the firm refers to as the “Fischer Trade.” The Fischer Trade is based off of ideas suggested in a recent speech by Stanley Fischer, vice chair of the U.S. Federal Reserve System.

The Speech

In a November 12 speech at a research conference, Fischer highlighted the effects of the strong dollar on the U.S. economy. According to Fischer, the impact of the dollar rally on inflation was transitory, but its impact on the real U.S. economy was more durable. Exports have certainly been under pressure, but the general economy has benefited from relaxed monetary conditions.

The Trade

In response to the speech, Credit Suisse identified…

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