ECB vs. The Fed
"The divergence in approaches on either side of the Atlantic is likely to stoke tensions. Americans resent Europeans for not sharing the burden of stimulating the world economy, forcing them into unilateral action. Europeans resent Americans for blundering foolishly ahead, exacerbating inflation. For years there has been an unhealthy imbalance in the world economy, with the United States contributing disproportionately to the growth in demand and doing too little in the way of saving. The response to the current economic mess increases that lopsidedness. Americans are spending heavily to head off the risk of recession while Europeans close their wallets."
To the extent that the exchange rate adjusts, the ECB do not need to worry about inflationary spill-over from Fed policy. And as we know the dollar has indeed fallen significantly against the euro. But has it fallen enough? That seems more dubious as commodity prices have risen a lot more than the dollar has fallen. That can of course to a large extent be blamed on the ECB's more moderate inflationism, but it can also indicate that the dollar hasn't fallen enough.
Mallaby also compared the Fed's action to Bush's action in the Iraq war case, and the split this created with Germany and France. Assuming this analogy is correct, which it probably is, this means that America will face several years of deep problems due to their over-activism, like they have done for the past 5 years in Iraq.