POPA ReconJapan, Bretton Woods 2.0, and the End of the Carry Trade Era
Japan, Bretton Woods 2.0, and the End of the Carry Trade Era Bessent's move to the New York Fed is important because it signals that the Treasury understands that movements in long-term interest rates are driven by money flows, not the inflation fears that Wall Street constantly recycles. Now Japan is at the center of the story. If Tokyo must step up to defend the yen, the Treasury could be forced to sell U.S. Treasuries, and long-term interest rates would rebalance as the largest foreign holder of U.S. debt turns into a seller. That's why this moment appears to be more than a routine phone…
The excerpt is quoted from a public Telegram channel, which owns its text.