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Fed Rate-Hike Wagers Put on Back Burner as Blackout Begins

  • Rapid eurodollar futures repricing met with bullish options
  • Trimming of tightening bets is “puzzling”: Citi strategist

Federal Reserve rate-hike expectations have been aggressively reduced over the past two weeks in the eurodollar futures market, just as policy makers enter their usual silent period before their April 28 decision.

The rapid repricing has removed around 15 basis points of rate increases from the December 2022 eurodollar futures contract. This shift away from fully pricing in a 25-basis-point rise has prompted Citigroup Inc.’s Jason Williams to fade the move and target fresh bets on a steeper curve.