Explore BrainMass

Fed Rates

The Fed just drop in interest rates in the US. What does this mean to a foreigner holding dollars? I guess another way to look at is what are the implications in terms of foreign exchange rates and capital flows?

Solution Preview

The drop in interest rates mean that foreign investors will not like to invest US dollars in the US. This means that the demand for US dollars will decline ...

Solution Summary

The solution answers the question below in great detail.