Wall Street Bull Yardeni Pins Turmoil on Yen Carry Trade Liquidation
CryptoNewsTerminal Staff05 Aug, 2024
Wall Street Bull Yardeni Pins Turmoil on Yen Carry Trade Liquidation
Ed Yardeni, a prominent Wall Street bull and President of Yardeni Research, recently expressed his belief that the ongoing turmoil in global markets can be primarily attributed to the liquidation of yen carry trades, rather than concerns over a potential U.S. recession. According to Yardeni, the Bank of Japan's unexpected rate hike triggered a significant liquidation of yen carry trade positions, which involve borrowing in low-yielding yen and investing in higher-yielding assets. The market had underestimated the extent of this liquidation, which exacerbated the selloff. While the unexpectedly high July U.S. unemployment figures and geopolitical tensions in the Middle East have contributed to the market's unease, Yardeni maintains that the selloff has been overdone. He believes it is more likely a technical correction than an indicator of an impending recession, as U.S. economic fundamentals remain solid.
