Reducing Interest Rate... US Fed Government

Faced with the threat of deflation, the Federal Reserve (US Federal Government) may be trying to drive the dollar lower to spur inflation at this moment.

As policy makers don't want home prices to deteriorate further, an alternative is to inflate the prices of all other goods and services: as a result, the relative prices of homes would be less expensive, so at least to help this housing sektor.

Weakening the dollar is an effective policy tool to drive up inflation as the cost of import goes up. Just be careful, the Federal Government may be getting more than it is bargaining for.