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Most U.S. regional banks haven't hedged rising rates – report
- gsibble 4y agoVery bad news.
- LatteLazy 4y agoIf the rate rises are expected, then the cost of hedging them will be approximately the same as the cost of not hedging them. Hedging isn't a magic process to evaporate risk. It's just buying insurance. And no one will insure you when your house is already on fire...
- Bostonian 4y agoIf you hedge Treasury bonds appropriately with Treasury bond futures, you are effectively left with a position in Treasury bills, which were yielding very little in 2021. If banks wanted that they would have just bought Treasury bills.