Could the potential unwinding of the massive Japanese Yen Carry Trade be the real reason the Federal Reserve just announced they are purchasing T-Bills? 🤔
When investors unwind the trade, they sell US assets (like Treasuries) to pay back cheap Yen loans. This drains global dollar liquidity, putting stress exactly where the Fed intervenes.
Is the Fed covertly fighting a $3 Trillion Yen market reversal?