Bond Traders' Confidence in Fed Rate Path Crumbles
- Eurodollar activity shows dwindling bets on four 2018 hikes
- For futures traders, hikes past June now also in question
This article is for subscribers only.
The latest bout of market turmoil is denting investor confidence in how aggressively the Federal Reserve will tighten policy this year.
Activity in options on eurodollar futures shows traders are starting to unwind bets that the central bank will hike four times in 2018. The evaporation of that wager, which implied one more increase this year than indicated in officials’ quarterly projections, is also apparent in rallying fed funds futures.