The Treasury’s recent moves in the bond and currency markets add up to ‘soft-form financial repression’ to lower debt costs, economist warns
"If the market price of USTs is not 'allowed' to adjust down, the foreign exchange price of UST owned by foreign investors has to adjust via a weakening in the dollar."
"If the market price of USTs is not 'allowed' to adjust down, the foreign exchange price of UST owned by foreign investors has to adjust via a weakening in the dollar."
BELLINGS Intelligence Score: 68
Why it matters
The Treasury's active intervention in bond and currency markets to suppress debt costs represents a significant regulatory and structural event with broad implications for credit markets, monetary policy transmission, and investor behavior.
Sources
Fortune
The Treasury’s recent moves in the bond and currency markets add up to ‘soft-form financial repression’ to lower debt costs, economist warns
"If the market price of USTs is not 'allowed' to adjust down, the foreign exchange price of UST owned by foreign investors has to adjust via a weakening in the dollar."