How much will the Fed cut interest rates next year? Some traders are betting on a 250 basis point cut.
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Zhitong App has learned that in the options market, at least one trader is preparing for the possibility of the Federal Reserve cutting interest rates by up to 250 basis points next year. If the Fed lowers the federal funds rate to around 3% before September next year, the trader's bet using the so-called SOFR options will pay off. It is reported that the premium for this trade is approximately $13 million.
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