They will try to protect the dollar as much as possible but I am affraid, they will try to avoid more a recession/depression that can come through by a massive housing crash. With a recession, the economy will lose many things as in high inflation. The main difference is: with rate increase, we know for sure the housing market is going to be hammered even harder, increasing significant stress on the economy. With delays in rate increase, inflation will increase, there is a higher risk that investments go away, but this risk is manageable. That is, there is some rooms with inflation for the fed to play before any possible catastrophy such as suggested.
To mention the losing of currency status, specifically oil denominated in US dollar status is pretty far fetched. That would involve both strong economic and political factors which I think can only remotely happen. If you are concerned about this one, the US certainly still have lots of room before the risk of this could be any serious threat.
