Because the dollar is free to adjust, U.S. interest rates can differ from rates abroad, and, consequently, the Fed retains the autonomy to set its federal funds rate target as needed to respond to domestic economic conditions.
Short-term interest rates affect the domestic economy through a number of channels (for example, by affecting the cost of holding inventories), so monetary policy could influence economic activity to some degree even if its control were limited to the short end of the yield curve. Moreover, the pricing of some putatively long-term financial assets may be strongly influenced by shorter-term rates.