This is at least one small step for (a) man and one giant leap for mankind in terms of blending economic logic into policy articulation. The standard treasury enunciated policy – “we believe in a strong dollar” – is probably the least bad choice for a simply stated but logically difficult exchange rate policy.

“We believe in a weak dollar” or “We believe in an average dollar” just doesn’t cut it.

“Just not yet” acknowledges the inevitability of cyclically varying exchange rates in a floating regime, given the real world of cyclical trade and current account imbalances, and the need for their eventual correction in such a regime.

But what does “strong” really mean on a secular or trend basis?

Suppose “strong” means the opposite of “weak”. Then a secularly strong currency is a strengthening one. This is marginally deflationary at the national level. Why should secular deflation be the desired domestic impact of a currency’s value, unless the domestic economy is undergoing secular inflation apart from the currency effect? As a combination, this doesn’t seem like a desirable policy objective for the long term.

Suppose instead “strong” means a tendency to revert from periodic weakness toward some equilibrium level of “strength”, with some periodic overshooting as necessary. But this ends up distorting the meaning of words even more so.

Perhaps “strong” is misused when the intended secular meaning is really “not weak” and “not strong” but “just right”. The latter includes corrective cyclical episodes of weakness and strength. I’m just not sure how you express that as a policy, except to fit specific occasions such as the case for “just not yet”.