Central Banks
Pair of Big Bets Stand to Benefit If Odds Rise for Fed Interest-Rate Cut in July
- Pair of fed funds wagers to benefit if July rate-cut odds rise
- Only one basis point of easing is priced by July Fed meeting
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A pair of large bets in the fed funds futures market are attracting attention on Wall Street by setting aside the market-implied consensus for the Federal Reserve’s first interest-rate cut.
The wagers stand to benefit from a ramp-up in expectations that US policymakers will reduce rates as soon as July. While it’s still a far-fetched outcome — given only one basis point worth of easing is priced in by the July 31 decision — the bets underscore momentum in the market behind a cut.