Price concerns spark inflation activity


Rocketing oil and food prices have reawakened concerns about rising consumer costs, causing greater numbers of investors to put on inflation hedges. Dealers report increased activity in inflation-linked bonds and swaps, and even caps and floors, as the likelihood of inflation rates creeping above central bank-imposed targets increases.

The Bank of England, European Central Bank and US Federal Reserve have all expressed concerns about rising inflation in recent months. Despite cutting the federal

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