5min read
Published on: Aug 13, 2024
#Financial Markets
If we look at the S&P 500 since the pandemic, we can see that it has been extremely bullish.
The first bullish sentiment came from the Fed cutting interest rates to near 0% which was followed by a correction in the market as Fed Chair Jerome Powell stated that inflation was in fact real and not “transitory”.
As the Fed raised interest rates this resulted in the yen-carry trade as investors took advantage of the interest rate differentials by borrowing cash for 0% in Japan and deploying these funds into the US stock market.
Now that the BoJ has raised interest rates and alluded that more will follow, we are seeing an unwind in the carry trade which means that investors will need to start pulling out of the underlying positions where they deployed this capital.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice.
The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.
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