Singer Says Long-Term Bonds Are a ‘Senseless’ Speculative Trade

Bloomberg

Paul Singer Photographer: Patrick T. Fallon/Bloomberg

«There’s a really good chance of a tremendous surprise, and a surprise in the relatively near future,» said Singer, speaking on the likelihood of consumer prices spiking higher. Expansionary fiscal policy is helping to drive the change in outlook, even as the Federal Reserve, which holds a meeting next week, has struggled to gin up much inflation in the past decade with its own tools. Singer, whose Elliott Management Corp. Along with inflation expectations bubbling higher, long-term government bond yields have surged, with the 10-year Treasury yield hovering near 1.09%, up 18 basis points just this year.

Singer added that the worst trade he’s ever put on was in 2008, buying Japanese inflation-linked bonds against non-inflation linked bonds. At the bottom, after Singer had «lost more money than I thought I could possibly lose in any trade,» the notes had an implied deflation rate of 4.5%.

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Source: Katia Porzecanski and Liz McCormick | Bloomberg

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