Over the last three decades global financial markets have become dominated by carry trades. The emergence of this “carry regime” has very important consequences for the world economy; yet is still not widely understood. In this talk; we will explain why this system developed; how it impacts the returns to risky assets and what potential paths lie ahead of us. Our talk explains how carry trades drive market liquidity; credit creation and the pattern of market returns. We then discuss how and why the S&P 500 itself has been turned into the world’s most important carry trade. Central banks; in particular the Fed; have been captured by this process and we show how their actions contribute to the carry regime’s growth. Lastly; we discuss how the markets might evolve in the future and what indicators will tell us if the carry regime is ending or continuing to grow. The talk will draw on research and theory from the authors’ book; which was ranked #1 in a range of Amazon business and investment categories this spring.