US Treasury Secretary Bessent says he does not think carry trade is going to go away entirely

US Treasury Secretary Bessent says he does not think carry trade is going to go away entirely.

Remarks on carry trades from a Treasury Secretary sit in the category of jawboning rather than policy, and officials at that level have historically commented on funding-currency dynamics mainly when positioning around them has become crowded enough to draw official attention. The framing here is notably permissive: acknowledging that the carry trade persists is closer to a shrug than a warning, and such acceptance language has tended to leave the trade intact, whereas the episodes that have unwound carry violently have been triggered by shifts in the funding leg, rate differentials compressing or a volatility spike in the funding currency, not by commentary. The actors matter: Bessent comes from a macro trading background, so his read on positioning carries more weight with the FX community than a typical political appointee's, and his phrasing will be parsed for any distinction between tolerance and endorsement. What separates benign carry regimes from fragile ones is the volatility regime in the funding leg and the interest rate differential that pays the carry; commentary does not change either, but it can mark where official discomfort begins. The tells worth noting are whether other officials echo the theme, any shift in funding-currency volatility pricing, and whether the remark was a response to a question or volunteered, the latter historically signalling more intent.