Bond Traders Double Down on 2017 Fed Bets Via Options Hedges
- Growing expectations for a September pause and a December hike
- Eurodollar options market following theme of futures trading
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Bond traders are ramping up wagers that the Federal Reserve is done raising interest rates until December.
Open-interest data from the eurodollar options market in the wake of the Fed’s rate hike last week show traders are piling into a bet already popular in futures: that the central bank will skip a September rate increase and wait until the final policy meeting of the year to tighten again. That’s reflected in the buying and selling of call spreads on futures contracts.