Norman: Let’s talk about the outlook. Last year was not such a good year for the U.S. dollar. It started out with a rebound, but then basically gave everything back. You had a lot of bearish dollar sentiment, which built up through the course of the year, people commenting about the quantitative easing going on by the Fed, how that will eventually – some people say – lead to a crash in the dollar. Now I know you have not been that bearish longer term; you’re more constructive. What is your outlook for this year? Woolfolk: This is going to be a year of two halves, Mike. The first half of the year is going to be a dollar weakness; the second half of the year is going to be dollar strength. The transition factor will be the Fed, and the Fed’s decision to begin normalizing interest rates. Norman: Now you see that happening then in the second half of the year, notwithstanding some of the data now; for example, the most recent being the jobs report for December, which showed a very disappointing 85,000 loss in payroll jobs. We’re running into, now, more than two years of job losses. Some say that that’s a little bit jumping the gun, this expectation that the Fed is going to start reversing policy. You don’t? Woolfolk: Don’t think so at all, not worried about the -85,000, Mike. The way that the nonfarm payrolls number is calculated is something derived from the 1930s. It’s one of the difficult measures to forecast by the street because of the way that it’s processed and calculated. The revisions sometimes … Norman: Yeah, we saw a revision on the November number, which actually took it from a negative 11,000 to a positive 4,000. So it’s feasible that we could see a revision on the December number. Woolfolk: And I’m not concerned about it. Certainly we’re in a much, much better position now than we were at the beginning of the year [2009]. I think within the next several months, we’re going to see nonfarm payrolls consistently in positive territory; not long after that, we’re going to see the unemployment rate start to fall below the 10 percent level. Kansas City Fed President Hoenig said just yesterday [Jan. 12], an offhand comment following a speech that he gave, that he does not think that unemployment has to necessarily fall significantly below 10 percent in order for them to begin considering raising interest rates. So I think the writing is on the wall … | 
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