One Day After Fed Hike, Traders Are Betting Cuts Will Start in 2024
- Eurodollar futures price in policy easing in under three years
- Reflects broader concern that rate hikes will slow growth
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Just one day after the Federal Reserve kicked off its cycle of interest-rate increases, traders are speculating the central bank will start easing monetary policy again in less than three years.
The implied yield on December 2024 eurodollar futures is 2.39%, or 28 basis below the year-earlier contracts, indicating that traders expect the Fed’s benchmark rate will be cut over that time. The gap was 0.2% on Tuesday before the Fed policy meeting and was at zero as recently as in February.