Traders Bail on Fed Rate-Cut Bets After Powell’s Hawkish Message
- Mass exodus from December upside SOFR options seen Friday
- Fed chief reinforced that more rate hikes are likely this year
A trader works on the floor of the New York Stock Exchange.
Photographer: Michael M. Santiago/Getty ImagesThis article is for subscribers only.
Traders in the US short-term interest-rates market are giving up on the idea that the Federal Reserve will cut rates this year, fueling a mass exodus from dovish wagers hedging such a scenario.
Options open interest, which registers the amount of risk held by traders, dropped sharply across a number of strikes shown by preliminary CME data released Monday, a sign of capitulation after heavy pullback from rate-cut wagers Friday.