Reported about 1 year ago
Traders in the US rates options market are making bold wagers on the Federal Reserve cutting interest rates by a significant 3 percentage points in the next nine months. Investors are positioning for a key rate decrease to as low as 2.25% by the first quarter of 2025, despite current expectations being lower. The options market is showing increased bets on this outcome, with some contracts set to benefit if these extreme rate cuts occur, potentially used as a hedge against other investments. Amidst the economic data and Fed remarks scrutiny, traders are also eyeing tail-risk outcomes, like sudden and drastic rate reductions, which have been gaining traction among market participants.
Source: YAHOO