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NEW YORK (TheStreet) -- Sometimes doing nothing is the same as doing something -- at least, that's how it is when it comes to the Federal Reserve not raising interest rates.

The stock market stays high because the Fed is not going to raise short-term interest rates. The Fed is not going to raise short-term interest rates because the U.S. inflation rate remains low. The inflation rate remains low because the value of the U.S. dollar is high. The dollar is strong because world commodity prices have fallen and have "driven up the dollar and held down U.S. import prices."

According to the Financial Times, the last three items mentioned are interrelated. Furthermore, it now seems as if momentum is picking up within the Federal Reserve to postpone any increases in it policy rate for an extended period of time. That inaction may not be the best decision in terms of the relative strength of currencies. 

At least the doves -- those reluctant to raise interest rates -- are making their voices heard on the issues. Yesterday, Daniel Tarullo, one of the Fed's Governors, joined another Fed Governor, Lael Brainard, who argued on Monday that the Fed should not raise its target short-term interest rate any time soon.

The value of the dollar fell. By early afternoon Wednesday, it cost around $1.145 to buy a Euro, the same rate as on Sept. 17, the day the Federal Open Market Committee decided that the Fed would keep its target short-term interest rate unchanged.

The Governors believe that inflation is not going to return that quickly and that without data supporting the return of inflation toward a level closer to the Fed's target rate of 2%, there should be no upward movement in the policy rate.

Certainly, the predictions of Fed officials don't indicate any quick return of the economy to the Fed's target. In these forecasts the expectation is for the inflation rate to pick up in 2016 and 2017, but a 2% inflation rate is not expected until 2018.

That's a long time.

According to the Financial Times article, if the Fed doesn't move interest rates for a long time, the value of the dollar will continue to fall. This should connect to a faster rise in inflation than is forecast by the Fed.

With interest rates constant, the stock market should continue to rise.

But if inflation begins to rise, the Fed will have a justification for raising short-term interest rates, which will cause the value of the dollar to increase. This will result in slowing down the inflation rate once again.

According to this argument, the stock market should begin to fall because the Fed is raising interest rates

The key connector here seems to be the relationship between the value of the U.S. dollar and any action that the Federal Reserve might take on raising short-term interest rates.

The Financial Times article seems to believe that the route of causation here is from world commodity prices to the value of the U.S. dollar, to U.S. inflation, ending with the action of the Federal Reserve.

The market seems to be acting according to another path. If the Federal Reserve does not raise interest rates, the value of the US dollar will fall and this will have an impact on the commodity prices of emerging nations, causing import prices and U.S. inflation to rise.

So, what is the causative factor here?

In the Financial Times article, the causative factor seems to be commodity prices and the effect these commodity prices have on the U.S. dollar and inflation.

This seems to be the view of Fed Vice-Chairman Stanley Fischer and the Federal Open Market Committee. The decline in the price of oil and other commodity prices is just a temporary deviation from the level these prices should really be at.

Once these prices begin to return to level they were previously at, then inflation will move to a higher level and the value of the dollar should decline. The Fed can then raise short-term interest rates and this will bring markets back to a more normal condition.

But, what happens if oil prices and commodity prices do not return to higher levels and inflation does not return to the 2% level?

Right now, the Eurozone is showing deflation and the UK has produced a 0.1%, year-over-year decline in prices. China seems to be battling price weaknesses, as do several emerging markets.

Rising levels of inflation are not a sure bet for the Federal Reserve. Expected data releases do not lend a lot of confidence in the "return to higher" rates of inflation.

This view about inflation being the causative factor does not account for investors who seem to want the value of the dollar to remain strong. These investors believe that the Federal Reserve will raise short-term interest rates now.

This latter scenario raises the possibility that if the Fed does not raise its target policy rate, other countries will have to take further action to ease up further on their economic policies. The European Central Bank will extend its quantitative easing. The Bank of England will not raise its policy rates. The Peoples Bank of China will attempt to achieve further ease so that the renminbi will fall against the U.S. dollar.

In effect, this looks like a currency war, and the world cannot afford a currency war at this time.

The Federal Reserve needs to take these things into consideration in making their policy decisions. They are, after all, the global reserve currency and they cannot avoid the responsibilities that go along with this position.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.