If you listened to Bernanke’s response to Paul, if you read Mishkin’s latest speech, or if you heard Alice Rivlin today (I love XM in my car) you would realize that your claim is simply not true.
If the dollar devalues in a avalanche fashion (say, 1$ = 2+ Euros) maybe the Fed will care, but until that point, the Fed might very well see the currency devaluation as a market solution to the current trade imbalances … excepting the renminbi, I suppose. As long as domestic prices do not rise with import prices, the Fed probably won’t care.
