Borbora-Sheen Bets on Warsh with Yield Curve Steepener Trade
Ninety One's portfolio manager Jason Borbora-Sheen is taking a contrarian stance on the Treasury market by betting that ebbing price pressures will restore faith in Federal Reserve Chairman Kevin Warsh's inflation-fighting credentials.
Borbora-Sheen is positioning for a rally in 30-year Treasuries, which has suffered a big selloff since July, relative to the 10-year maturity. This move is a two-pronged bet on the market, as it involves adding to a popular trade known as the yield curve steepener.
The yield curve steepener is one of the most popular trades this year, and Borbora-Sheen's decision to add to it may signal that he believes in its potential. The 30-year Treasury has been underperforming the 10-year Treasury since July, but Borbora-Sheen sees an opportunity for a rebound.