Indices and DerivativesInflation hedging back in focus after US election result
To quote the Bank of England, inflation swaps are “like the crystal ball of inflation expectations, allowing traders to hedge against inflation risk and giving us a peek into the minds of market participants”. With the recent Trump election victory and prospect of a return to US protectionism, let’s see what the inflation swap markets are telling us about expected US inflation and examine how commonly used bond and swap market inflation hedges have performed over recent months.
By Index Team , Parameta Solutions