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Suppose that tomorrow the dollar spikes, due to currency manipulation mentioned in the article. Because of your excellent training, you are asked to advise Jerome

Suppose that tomorrow the dollar spikes, due to currency manipulation mentioned in the article. Because of your excellent training, you are asked to advise Jerome Powell, Chairman of the Federal Reserve System. Powell is worried about depressed investment in the US financial system. He and the European Central Bank both realize that global financial markets as a whole will be affected. Powell is receiving two types of advice, from Politicians and Bankers. The Politicians say it is best to intervene in markets immediately, cut interest rates, and let investors know they can borrow cheaplythis will boost investment. The Bankers assert that it is best to let the US and global financial markets equilibrate slowly on their own, since after all the current background involves not just finance but also a major public health issue with Covid-19. Moreover, Bankers say that if there is any mispricing, smart traders will quickly pick up the deals via arbitrage and eliminate mispricing. How would you advise Chairman Powell?

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