The Fed increase the federal fund rate and resulting in an increase in the nominal interest rate in the U.S. market. The U.S. dollar becomes more and more attractive to global investors due to mainly two reasons. One is that the U.S. dollar behaves as the safety currency (detailed reasonings are shown in the previous posts), and the other is that the increase in the interest rate attracts money from other countries to be invested in the U.S. market.
U.S. dollar gets appreciated for the above two reasons, and thus the U.S. faces an increase in trade deficits. For the aggregate U.S. market, imports are way more than exports. However, those extra imports are clearly paid through the U.S. dollar or exchanged with other currencies (but shared with the same logic as paid with USD). And that extra amount of US dollar is from the helicopter drops and QE of the Fed. That means the extra US dollars back with nothing, but are used to purchase/import assets from other countries. Right! it do not need to be backed by other in the current economy (Also, MMT advocates even crazy).
I am telling that those facts are equivalent to that the U.S. is getting net imports from other countries for free. Also, the U.S. is sending its “worthless” extra currency to others, exchanging goods and services. Productions are not working in a good way for those exporting countries in the battle with the pandemic.
Due to the fact that the US dollar is the safest currency, the extra printed amount is absorbed by other countries that get net exports to the U.S. Those other countries export goods and services and import back inflation. There are also countries that conduct QE in a similar rhythm to the U.S. would face even higher inflation intuitively, because the US dollar is the safest one and the only one linked with crude oil and commonly accepted in commodities trading but other countries’ currencies are not.
Fed放水，释放美元供给，按quantity theory of money的说法：people hoard money instead of spending them。但是现实中， hyperinflation comes later than the theory tells。原因可以部分可以参考MMT。同时美元作为 1. 最safest的货币，且 2. 与石油挂钩，并未大宗商品交易的主要媒介，仍然有很大的需求。导致虽然市场上美元供给增加了，但是因为紧张的国际关系、俄乌战争、de-globalisation、pandemic的影响，以及上述两条原因，市场上对美元仍有大量需求，导致inflation没有立刻到来。
但是，大量printed US dollar实际上并没有real goods\ productions or services的支持，很多出口商品的他国公司获得美元（or other currencies, but similar as holding USD）交付（美国import，其他国家export），这里的美元只能用来交易且为extra美元。相当于是Fed pays nothing印的钱，买了real goods。这些出口国家失去了商品、产能、and factors，得到了USD，相当于得到了nothing but inflation，由美国extra money printed 带来的 inflation。
同时一些国家与美国同步QE印钱，执行类似的monetary policy降息，为了保证foreign exchange相对稳定。但是这些国家的货币并非如同USD一样highly demanded。所以这些国家的货币难以与美元继续peg，脱钩后会引入even higher inflation。
Implications：自主货币政策（而非peg）的重要性；外汇储备以应对紧急 外汇、国际经济（如利差倒挂）情况的重要性；以及外汇市场中globalisation情况变化下的monetary policy的重要性。