Traders Add Bets That Fed Will Skip Interest-Rate Cuts This Year
- Option trades target Fed on hold and higher yields further out
- Meanwhile in futures, historic shift has positioning stretched
The Federal Reserve building in Washington, DC.
Photographer: Erin Scott/BloombergThis article is for subscribers only.
Traders in the US interest-rates market have started to put on wagers that the Federal Reserve will refrain from cutting borrowing costs this year.
With the economy proving resilient and progress on inflation having stalled, policymakers of late have been signaling that they expect to keep rates higher for longer. That’s had ripple effects across hedging instruments.