Lack of inflation clearing could hit LDI community

A different track

michael-davie

The liability-driven investment (LDI) community may pull back from the inflation swap market because funds are unable to clear their trades, market participants are warning – the result of a likely cost increase due to hedge portfolios being split between cleared interest rate swaps and uncleared inflation swaps.

LDI funds in the UK in particular are big users of both products, but while several central counterparties (CCPs) currently clear interest rate swaps, none are yet clearing inflation

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