US dollar, broad index

Commodities are priced in dollars and much of the developing world borrows in them, so this index is the transmission belt between American monetary policy and everybody else's financial conditions. A rising dollar makes oil more expensive for a country that does not earn dollars, and makes its existing debt harder to service at the same time.

We use the Fed's broad index rather than the more widely quoted DXY. DXY is dominated by the euro and yen and says little about the emerging markets where the dollar actually bites.