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Market Extra: More pain likely for hedge funds as leveraged investors unwind wrong-way bond market bets, traders say

Market Extra: More pain likely for hedge funds as leveraged investors unwind wrong-way bond market bets, traders say

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There’s likely more pain coming for hedge funds, the heavily leveraged investors which are incurring significant losses from wrong-way positions on the direction of interest rates in the U.S. and across the world, traders say. Some hedge funds had expected major central banks like the Bank of England and Federal Reserve to turn hawkish on monetary policy given persistent inflation pressures and were caught off guard in the past week by unanticipated dovish pivots, as well as by the flattening of bond-market yield curves.

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