AlphaSimplex’s Kathryn Kaminski warns bond traders can’t rely on traditional playbooks anymore

Bond traders who spent their careers watching GDP prints and jobs reports for direction are finding those old compasses increasingly unreliable. Kathryn Kaminski, Chief Research Strategist and Portfolio Manager at AlphaSimplex Group, says the fixed-income market has fundamentally shifted: geopolitical risk and inflation dynamics are now calling the shots, and traditional economic growth signals have been demoted to supporting characters. The warning lands at a particularly sensitive moment, coming shortly after the latest Federal Open Market Committee meeting, where policy decisions continue to weigh heavily on the long-term outlook for bonds. The old model is breaking down Kaminski argues that the bond market has become a tug-of-war between policy decisions and reactions to geopolitical instability, creating a whipsaw environment that punishes traders anchored to older models. “It’s still really a back and forth between policy and reaction to geopolitical risk that’s key for bonds.” AlphaSimplex, a firm specializing in systematic, quantitative investment strategies, actively trades fixed-income futures and runs managed futures strategies that rely on trend-following signals rather...