At her recent Senate confirmation hearing, Janet Yellen was asked for her views on the dollar. Hearing the question, she may have felt some nostalgia for the Fed, where such issues could be deflected to the Treasury Secretary. But the challenge of managing the dollar is now firmly on her shoulders.

Without missing a beat, Yellen moved into the new terrain. She underscored her belief in “market-determined exchange rates”. Under the Biden administration, the dollar’s value would be determined by foreign exchange markets, and the US would not “seek a weaker currency to gain competitive advantage”.