One framing I keep coming back to is this: currency carry in emerging markets is real yield — but real risk follows right behind. What is happening: High nominal interest rates in EM often reflect inflation expectations and currency depreciation risk. The yield differential compensates for a probable weakening of the local currency. Why it matters: That is why local currency EM bonds can lose in dollar terms even when nominal coupons look generous. In practice: A bond yielding 12% in local currency that depreciates 10% against the dollar delivers roughly 2% in dollar terms — no longer an extraordinary return. Watch for: The mistake is treating the nominal yield spread as free return without hedging or expecting the currency adjustment. Useful lens: Before reacting, ask what mechanism would still matter here if the headline disappeared tomorrow. The point is not to memorize the label. The point is to know what variable is actually doing the work.