They’re gonna take it as low as they can. We owe tons of money to the rest of the world, and the easiest way to get out of paying it back is to reduce the value of the currency itself. Devaluing the currency also helps politically with the housing situation — since voters don’t want to see their home prices go down, a devalued currency will help keep them from falling too fast or too far (assuming we get wage inflation at some point, which of course might not happen). 90% of Americans never leave the country anyway so they won’t notice until the Yuan gets revalued (if it ever does) since everything they buy is Chinese. Oh and of course it makes the few exports we still have cheaper, so it’s good for business. Devaluing the dollar is a win-win-win for the fed and the US gov, so expect them to do it. The only one that might not work out in their favor is the housing situation, but they don’t care about a bunch of dumb people that borrowed too much money anyway.
