Cracks start to show in US reflation bets craze

Some hedge funds believe popular bets on rise in US inflation have run out of steam

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Betting on a rise in US inflation has been a popular trade in recent months, but some hedge funds think the so-called reflation trade has now run its course and are considering ways to take the opposite view.

Some of those hoping to profit from expectations of higher inflation have put on ‘curve steepener’ trades – bets that the gap between the yields on short-term and long-term bonds will widen.

The curve steepener trade paid off for Silex Investment Partners in mid-February, says Maxime

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