According to BlockBeats, on September 5, interest rate options traders increased their bets that the Federal Reserve will cut interest rates by 50 basis points this month, reflecting the market’s growing speculation that policymakers will take aggressive action to prevent the economy from getting into trouble. Currently, swap contracts show that the probability of the Federal Reserve cutting interest rates by 50 basis points this month is about one-third.
Options tied to the secured overnight financing rate (SOFR) show a sharp surge in open interest, or the number of positions held by traders, in some call contracts expiring on September 13, five days before the FOMC’s rate statement. If Friday’s non-farm payrolls report and next week’s consumer price index (CPI) data show that the job market and inflation are cooling, which will be enough to justify the Fed to ease policy more quickly, then these positions will be rewarded. (Jinshi)
