US inflation swaps price in big short-term tariff impact, flag recession risk
NEW YORK (Reuters) -Investors in financial derivatives called U.S. inflation swaps are betting that President Donald Trump's tariffs will have a hefty short-term impact on consumer prices that will recede in the next few years as recession concerns escalate. Inflation swaps are used to hedge against a rise in prices. Specifically, the receiver agrees to exchange with the payer a fixed amount for floating payments tied to the Consumer Price Index (CPI) for a given notional amount and period of time.