Traders Hedge Against Zero Fed Rate as Talk of Crisis Cut Swirls
- A quarter-point cut next month is fully priced in by markets
- Hit to sentiment, trade spur chance of emergency cut: UBS
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Money-market traders are starting to bet on the idea that the spreading coronavirus will prompt swift and deep interest-rate cuts from the Federal Reserve, and potentially even an emergency meeting.
Some participants in the eurodollar options market have begun hedging against the idea that the central bank benchmark could plummet to zero -- around 1.5 percentage points below the current target -- as soon as June.