1/5
What do you do if you're a hedge fund that has been burned badly by the yield curve flattening? Why you double-down on the same bet!
ft.com/content/bc799a… (
What do you do if you're a hedge fund that has been burned badly by the yield curve flattening? Why you double-down on the same bet!
ft.com/content/bc799a… (
2/5
From the story above ...
But traders and strategists say that some hedge funds are wagering that the yield curve will not flatten much more. ... Kavi Gupta, Bank of America’s co-head of rates trading, said that funds were indeed “still in steepeners”
From the story above ...
But traders and strategists say that some hedge funds are wagering that the yield curve will not flatten much more. ... Kavi Gupta, Bank of America’s co-head of rates trading, said that funds were indeed “still in steepeners”
3/5
A reminder of how the steepening trade has worked out for hedge funds so far
October 27
bloomberg.com/opinion/articl…
A reminder of how the steepening trade has worked out for hedge funds so far
October 27
bloomberg.com/opinion/articl…
5/5
The yield curve has not stopped narrowing since late October, making a new 14-month narrow just yesterday.
Good luck to all the "masters of the universe" that think the path to riches is double-down on losing ideas.
That's always worked out well in the past.
The yield curve has not stopped narrowing since late October, making a new 14-month narrow just yesterday.
Good luck to all the "masters of the universe" that think the path to riches is double-down on losing ideas.
That's always worked out well in the past.
Bonus #1
This "doubling-down" on curve steepeners fits with what I see ...
The consensus, which includes hedge fund managers, still believes that inflation is transitory, the Fed will not hike as much as priced in, and Omicron is a non-event.
This "doubling-down" on curve steepeners fits with what I see ...
The consensus, which includes hedge fund managers, still believes that inflation is transitory, the Fed will not hike as much as priced in, and Omicron is a non-event.
Bonus #2
So, even though yield curve steepeners has been a bad idea to date, they are convinced if they keep at it long enough, inflation will subside, the Fed will back off the rate hikes, the yield curve will do a massive wheelie (steepen) ...
... and they will all get rich!
So, even though yield curve steepeners has been a bad idea to date, they are convinced if they keep at it long enough, inflation will subside, the Fed will back off the rate hikes, the yield curve will do a massive wheelie (steepen) ...
... and they will all get rich!
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