Investors price in growing chance of another Federal Reserve interest rate rise
==========
Traders have built up bets that the Federal Reserve could raise interest rates again, a once-unthinkable prospect that highlights a shift in market expectations after stronger than expected US economic data and hawkish comments from policymakers. Options markets now suggest a roughly one in five chance of a US rate increase within the next 12 months, up sharply from the start of the year. Traders’ central expectation is for one or two rate cuts of a quarter of a percentage point each this year, down from six or seven in January. Economists expect core personal consumption expenditures will come in at 2.7 per cent when data for March are released on Friday. Options pricing reflects a roughly 20 per cent chance of a rate rise this year. However, while investors are using options to hedge against — or profit from — the possibility of rate rises, a swift series of cuts also remains a possibility.
#FederalReserve #InterestRates #UsEconomy #UsInflation #OptionsMarket
https://www.ft.com/content/8c5da64b-766e-4993-86f5-aac95342432a
Financial Times /
npub1ey5…tq7p
2024-04-23 06:59:43
Author Public Key
npub1ey55s7y4px7nuw9qq987mhc2lm8qp30xvyrkgqk9p626n78zfcxqw0tq7pPublished at
2024-04-23 06:59:43Event JSON
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"content": "Investors price in growing chance of another Federal Reserve interest rate rise\n==========\n\nTraders have built up bets that the Federal Reserve could raise interest rates again, a once-unthinkable prospect that highlights a shift in market expectations after stronger than expected US economic data and hawkish comments from policymakers. Options markets now suggest a roughly one in five chance of a US rate increase within the next 12 months, up sharply from the start of the year. Traders’ central expectation is for one or two rate cuts of a quarter of a percentage point each this year, down from six or seven in January. Economists expect core personal consumption expenditures will come in at 2.7 per cent when data for March are released on Friday. Options pricing reflects a roughly 20 per cent chance of a rate rise this year. However, while investors are using options to hedge against — or profit from — the possibility of rate rises, a swift series of cuts also remains a possibility.\n\n#FederalReserve #InterestRates #UsEconomy #UsInflation #OptionsMarket\n\nhttps://www.ft.com/content/8c5da64b-766e-4993-86f5-aac95342432a",
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