Goldman’s rates traders have been crowd-watching

Talking Heads 2022: Steepener unwinds in sterling were “canary in the coalmine”, says rates trading co-head

Goldman Sachs headquarters, New York

This article is the second in a five-part series of interviews with senior bank rates traders. The first is available here.

When the UK swaps curve began to flatten in the fourth quarter of last year, it was no surprise. Monthly inflation numbers had been consistently above the Bank of England’s 2% target, and the big question was when – rather than if – the central bank would hike rates in response.

The shock came in mid-October, when rapid flattening accelerated into an abrupt inversion –