Draghi Could Cripple One of the Hottest Trades in U.S. Rates
- Speculative wagers on Fed rate cuts are at all-time highs
- But there are signs of trouble ahead of ECB decision Thursday
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Mario Draghi’s last act at the helm of the European Central Bank could be the beginning of the end for a massive consensus trade on U.S. interest rates.
Bets on Federal Reserve easing are at all-time highs, according to speculators’ latest positioning in short-term rates. But that vision for at least a half-point of U.S. cuts this year -- backed largely by a conviction that central banks globally will unleash more stimulus -- looks dicey after policy makers in Sweden, Canada and Australia pushed back last week.