To cool an overheating economy, the Fed will likely slow its open market purchases.
FORBES: 'Quantitative Easing' Is A Toxic Phrase for a Routine Policy
The immediate worry is that all this could water down or delay the measures needed to cool an overheating economy.
While continuing to monitor the real-dollar relationship, Mantega has now turned his attention to controlling inflation in an overheating economy.
Thus a strong dollar is also in the interest of America's overheating economy right now as it is helping to keep down inflation.
ECONOMIST: A weaker yen is good news, not bad, for Japan��s economy
Andy attributed the increases in food prices to shortages caused by recent bad weather in China, not excess demand due to an overheating economy.
FORBES: China's November Inflation Rate Jumps To 5.1 Percent
If the prices of vegetables, fruit and other crops are more flexible than other prices, food inflation may be an early warning of an overheating economy.
And China needs to allow its currency to move upwards, not just to help the rest of the world, but also to rebalance its own overheating economy.
On the contrary, with an overheating economy (the current-account deficit is likely to hit 9% of GDP this year) and almost half its trade conducted with Europe, Turkey looks vulnerable.
If so, the normal weapon to cool an overheating economy, higher interest rates, is likely to prove partly self-defeating in China because a rise in interest rates would lure in yet more hot money.
With greater confidence has come a consumer spending boom, which risks overheating the economy.
With much of the world increasingly worried about inflation, questions arise about what an overheating Chinese economy could do to global prices.
On Tuesday Dr. Yaga Venugopal Reddy, the governor of the Reserve Bank of India, set the alarm bells ringing when he warned that present rates of development risked overheating the economy.
The Federal Reserve has raised interest rates six times in the past 13 months to try to stop the economy overheating.
But if Beijing were truly worried about the economy overheating then surely it could cut public investment and run a budget surplus?
Mr Bondevik's team ignored the country's central bank, which had pleaded with it to tighten fiscal policy to stop the economy overheating.
If you were so inclined, you could have spent accordingly, contributing to the overheating of the economy and the inevitable recession that followed.
Japan obliged, despite signs that its economy was overheating and a financial bubble was developing.
The government line is that the economy is overheating only in this handful of sectors.
Loose monetary policy fuels inflation when the economy is overheating, not when it has lots of spare capacity, as now.
But concerns that China's economy was overheating led to action by the country's government last year, to cool down a construction boom by squeezing credit.
After cutting short-term interest rates to just 1% to help ease the country out of the 2001 recession, he has been raising them at a measured pace, trying to keep the economy from overheating.
Indeed, there is growing evidence that the American economy is overheating despite the chilly breeze from across the Pacific: consumer spending continues to boom, unemployment is at a 30-year low of 4.3%, and inflation is starting to creep up.
Not only does a fixed rate prevent a central bank from using interest rates to prevent an economy from overheating (because higher interest rates would push up the value of the currency), but it also encourages too much foreign-currency borrowing when foreign interest rates are lower than local ones.
The job market is so tight, in fact, that that some observers are worried that the economy is already overheating.
FORBES: Lessons for the United States from Russia's Job Creators
Government officials, however, still insist that the economy is not overheating yet.
But with robust jobs and housing figures sparking warnings of an overheating U.S. economy, many analysts believe it is only a matter of time before interest rates go up.
Since last year, the Chinese economy has shown signs of overheating due to the extensive government investment in infrastructure.
FORBES: Will the Chinese Government Be Able to Manage the Future?
With financial firms forecast to need another 15, 000 people in the next decade, the Edinburgh economy is in danger of overheating.
ECONOMIST: The financial industry in Scotland is enjoying a quiet boom
But as the economy recovers people are spending less or paying down debt, meaning that the economy is doing anything but overheating.
Potential growth is the maximum growth rate an economy could achieve without causing serious overheating problems.
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