n economic theory, the short run equilibrium condition upon which the value of a currency is determined is that the current account deficit must equal the surplus in the capital account, whereas in the long run the current account must balance.

The important Fed decision yesterday was not the rate cut (or the guidance of future interest rates), but the termination of QT, effective Dec 1. Since the introduction of QT in 2022, the Fed has allowed Treasuries and MBS to mature without buying replacements, thus enabling the...

Will the appetite for Treasuries increase in line with the US’s ballooning borrowing needs? There is a macro & micro dimension to this question. The macro relates to whether the Federal government can continue to finance its debt without raising interest rates. The micro relates...