Then-U.S. Federal Reserve Chairman Alan Greenspan called it a conundrum a decade ago when he boosted interest rates only to see bond yields fall. European Central Bank President Mario Draghi is facing a similar puzzle with the euro.
Stocks rose with Treasuries and the dollar weakened as Lawrence Summers withdrew his bid to become Federal Reserve chairman. Crude oil fell after the U.S. and Russia agreed on a plan to eliminate Syria’s chemical weapons.
The dollar surged against counterparts worldwide ranging from Australia’s currency to Turkey’s lira as the Federal Reserve’s signal it is getting closer to reducing monetary stimulus pushed volatility to the highest in a year and spurred losses in carry trades.
The Dollar Index declined for the first time in three days as a survey of the Federal Reserve’s primary dealers said confusion about the central bank’s intentions for its bond-buying program may be hurting the effort’s effectiveness.
Kang Man Soon wept on the day 15 years ago that she gave her gold wedding ring to the government, joining the millions who donated heirlooms to boost South Korea’s reserves during the Asian financial crisis.