The safe takeaway from Jay Powell’s remarks Tuesday is that he and his colleagues on the Federal Reserve’s Open Market Committee will keep reading the tea leaves.

Before they meet in March, they’ll see another monthly jobs report and a couple of more gauges of inflation. They’ll also certainly be looking at other economic stats that can provide clues to where this economy — and the global economy — are headed.

Like the report on U.S. international trade in goods and services for December, which we got Tuesday morning. The trade deficit increased by a fair bit over November’s reading — around 10% — to $67.4 billion, as exports fell and imports rose.

American companies have sold less stuff abroad as the global economy slowed down. Exports have also been hurt by the strength of the dollar, which soared last year, driven by rising U.S. interest rates. 

“So that makes the cost of U.S. goods more expensive, harder for people to import those goods, vis-a-vis, say, buying a domestic Irish sweater,” said Sharyn O’Halloran, a U.S. political economist who is teaching this semester at Trinity College Dublin. 

On the flip side, imports have become more affordable for Americans emerging from the pandemic, per Joe Brusuelas at consulting firm RSM.  

“The U.S. consumer still remains resilient and is going to spend for cheaper imported goods,” he said.

The strong dollar’s good for Americans abroad too. O’Halloran is seeing it in Ireland.

“A lot of people coming in — U.S. people with dollars — buying homes, trying to set up businesses,” she said.

That’s all well and good for the U.S., except that a strong dollar can also hurt a lot of players in the world economy, according to Quincy Krosby, chief global strategist at LPL Financial.

“It tightens financial conditions. It hurts emerging markets,” she said. “The other thing it hurts is the S&P 500 multinationals — it makes their products and services more expensive.”

Any signals from the Fed that U.S. interest rates will go higher — and stay high for longer — are likely to further strengthen the dollar and raise the trade deficit again.