Crowded Bearish Rates Trade Poses ‘Major Market Reversal Risk’

Crowded Bearish Rates Trade Poses ‘Major Market Reversal Risk’

Last week, I wrote that seemingly everyone has coalesced around some variation on a bearish rates theme. It was hardly a novel observation. Between inflation jitters and the prospect of preemptive rate hikes aimed at short-circuiting the expectations channel (at the risk of choking off growth and upsetting a dozen years of established behavioral patterns), market participants are almost uniformly pessimistic on bonds. In the latest installment of BofA's Global Fund Manager survey, global bond
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