Bets That Fed Hikes May Peter Out Spur Inversions in Eurodollars
- Rate on December 2024 future fell below one for year earlier
- Moves came after weaker-than-expected U.S. payrolls report
This article is for subscribers only.
Traders are increasingly betting that the Federal Reserve’s cycle of interest-rate hikes, which hasn’t even gotten underway yet, will fizzle out sooner rather than later.
Parts of the curve for eurodollar futures, which among other things are used by traders to bet on the direction of central bank policy, have been inverting over recent days. The rate on the December 2025 contract dropped below December 2024’s earlier this week and on Friday reached as much as 3.5 basis points lower.