Big investors brace for inflation comeback as rate-cut bets look risky

Some of the world's largest asset managers are adjusting their portfolios to prepare for a potential resurgence of inflation, despite market confidence in contained price pressures. BlackRock is increasing short positions in long-dated U.S. Treasuries, while Bridgewater Associates favors equities over bonds. Concerns about a resilient U.S. economy and rising commodity prices are fueling fears of renewed inflation. In contrast, euro area investors expect inflation to remain stable, while opinions in the U.S. are divided. Inflation-protected bonds are gaining interest as a hedge against potential price increases.