Traders Increase Bets On Fed's Potential Rate Cut This Month

According to Odaily, interest rate options traders have intensified their bets on a 50 basis point rate cut by the Federal Reserve this month. This reflects growing market speculation that policymakers will take aggressive action to prevent the economy from faltering. Currently, swap contracts indicate about a one-third chance of a 50 basis point rate cut by the Federal Reserve this month. Priya Misra, a portfolio manager at JPMorgan Asset Management, commented, 'The labor market has slowed down and is now catching the Fed's attention. Considering the current fund rate is between 5.25% and 5.5%, the economy is slowing, and the lag between monetary policy and the economy is notoriously long and variable. I believe there is a strong case for an initial 50 basis point rate cut.'