If the Fed is planning on pushing out the average maturity of their debt,…

http://www.bloomberg.com/apps/news?pid=20601087&sid=astqQ3k2_OJs

…wouldn’t it be in the best interest to begin unraveling the dollar carry trade? A more hawkish stance would cause risk aversion to come back to the fore, push yields down as more investors are convinced of a deflationary outcome and make it much much easier to roll out the debt. A weakening dollar and a fed no longer purchasing long term yields would cause rising yields if the fed started rolling over the debt…not to mention higher gold and commodity prices.

Obviously I don’t think rising rates would be the best course of action, but if the Fed mentioned that it will be withdrawing other props to the market, this in itself would cause dollar strengthening. Don’t you think?

This scenario makes logical sense to me and it seems that it’s the only thing the fed can do at this point. Them just letting the dollar continually depreciate would put off bond investors and put the US in a jam to rollover the debt anyways.