The Consequences of a Rising Dollar

In this chapter, the hosts discuss the potential consequences of a higher US dollar, including its impact on the US treasury market, western sovereign debt markets, and US banks. They delve into the dollar treasury feedback loop and explain how the increase in yields drives banks to join in the supply of treasuries, resulting in a continuous feedback loop. They also highlight the unintended consequences of policy decisions that led to this situation, such as artificial price controls and the negative impact on US shale production.