Recently, I've often seen people talking about hedging with the Bank of Japan raising rates and the Fed cutting rates. I really don't get it.
These two monetary policies are going in completely different directions—one is tightening liquidity, the other is loosening it. How is that considered hedging? Am I misunderstanding economics somehow?
Or is there some new strategy in the market? Could someone knowledgeable please explain the logic behind this?
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AirdropATM
· 12-07 06:59
Haha, that's a great question. In fact, most people who talk about hedging haven't really figured it out themselves.
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AlwaysAnon
· 12-07 06:59
The arbitrage opportunity from yen appreciation is gone, so what’s there to hedge...
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ContractTearjerker
· 12-07 06:59
Haha, hedge my ass, these two aren't even on the same level.
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MechanicalMartel
· 12-07 06:54
Bro, this explanation is indeed a bit far-fetched, I'm scratching my head too.
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GasFeeCrier
· 12-07 06:36
Haha, this logic is indeed bizarre. Feels like hedging for nothing.
Recently, I've often seen people talking about hedging with the Bank of Japan raising rates and the Fed cutting rates. I really don't get it.
These two monetary policies are going in completely different directions—one is tightening liquidity, the other is loosening it. How is that considered hedging? Am I misunderstanding economics somehow?
Or is there some new strategy in the market? Could someone knowledgeable please explain the logic behind this?