Wall Street’s Once-Niche Inflation Trades Hit $4 Billion in 2022
- Bonds and derivatives tied to consumer prices prove lucrative
- Revenue from inflation trades almost doubles in 2022
JPMorgan Chase & Co. headquarters in New York, US.
Photographer: Gabby Jones/BloombergThis article is for subscribers only.
Mounting inflation created lucrative opportunities for Wall Street’s biggest banks last year, a stark contrast to the millions of households struggling with climbing food and energy bills.
Lenders including Goldman Sachs Group Inc. and JPMorgan Chase & Co. made about $3.9 billion last year from inflation trading, a once-obscure business that deals in bonds and derivatives linked to consumer prices, according to data from Vali Analytics Ltd. in London. That’s almost double what the firms made in 2021 and compares with around $700 million before the Covid pandemic, the data show.