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Pauline hansons

US bond volatility players eye 2021 inflation bump

REUTERS: After a decade of central bank bond buying, fund managers have begun to wonder if there is again money to be made in betting or hedging against volatility in the bond market caused by an economic recovery next year. The ICE BofA MOVE Index, which tracks expectations of volatility in Treasuries, is again languishing near all-time lows after a spike in March was quelled by U.S. Federal Reserve intervention. But a handful of fund managers, and some major banks, warn of the risk of a spike in inflation next year that could spur losses for bond funds and more volatility before the Fed steps back in, or eventually even change the central bank's stance. Nancy Davis, who manages the Quadratic Interest Rate Volatility and Inflation Hedge ETF, said she has seen a jump in interest in recent weeks from investors worried about the impact of rebound in some of the consumer and asset prices quashed by this year's crisis. She argues that while stock markets have accounted for … [Read more...] about US bond volatility players eye 2021 inflation bump

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