Traders Reap Huge Profit on Fed Rate-Cut Bets Made Weeks Ago
- Wagers on September half-point cut in money as market shifts
- Positioning continues to build in October fed funds contracts
A television station broadcasts Jerome Powell after a Federal Open Market Committee meeting on the floor of the New York Stock Exchange on July 31.
Photographer: Michael Nagle/BloombergThis article is for subscribers only.
Traders who in July made what appeared to be long-shot bets on supersized Federal Reserve interest-rate cuts are now in line to reap huge profits after markets lurched their way.
In a big shift, the market is now pricing in a half-point rate cut at central bankers’ next policy meeting in September. Other activity in fed funds futures is signaling that traders also are starting to wager on an intra-meeting move before the next scheduled policy announcement.