Never Mind Rate Cuts. Options Show Fear the Fed Will Keep Hiking
- Trades in SOFR options target Fed rate ending 2024 higher
- Echoes those in futures betting against steeper yield curve
The Marriner S. Eccles Federal Reserve building in Washington, DC.
Photographer: Samuel Corum/BloombergThis article is for subscribers only.
Bond traders have capitulated to the Federal Reserve, abandoning hopes that it would slash interest rates aggressively this year.
In the options market on Friday, the speculation shifted even further: A long-shot bet was placed on the Fed tightening monetary policy even more.