Insight - Fed’s Powell wrongfoots hedge funds on dollar and bonds

The bets by hedge funds, based on the initial reaction to Powell’s remarks in rates and currency markets, were misplaced.

HEDGE funds loaded up on the dollar and sold Treasuries ahead of Federal Reserve (Fed) chair Jerome Powell’s Jackson Hole speech last Friday, anticipating a nod to a bond-buying taper timeline that would push yields and the greenback higher.

But based on the initial reaction to Powell’s remarks in rates and currency markets, these bets were misplaced.