Trading Idea of the Week: The Carry Trade (Part 1 of 2)

1 min read

As traders and investors, we know that certain events trigger market-wide volatility much more than others. Interest rate decisions by countries fall into this category, simply due to the enormity of the implications behind each announcement. A nation’s entire money supply is directly attributable to the headline interest rate of the country. In the United States, that rate is the Federal Funds Rate, which is currently 2.5%. That’s the maximum rate banks can borrow from/lend each other in the US banking system. When the Fed Funds rate is increased, it leads to a contraction in the US money supply, essentially…...

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Raghu Kumar Raghu Kumar is a fintech entrepreneur who has co-founded VC backed companies and has a background in algorithmic trading. His current pursuit is with RAIN, an AI-driven hedge fund. RAIN's purpose is to chase extraordinary returns solely using quantitative investing and trading strategies.