Morningstar on Nostr: Options traders see rising risk of Fed rate hike following oil rally, solid U.S. data ...
Options traders see rising risk of Fed rate hike following oil rally, solid U.S. data
==========
Options traders are seeing a rising risk of a Federal Reserve rate hike following an oil rally and solid U.S. economic data. Barclays strategists note that rates markets are now positioned for the possibility of fewer rate cuts than the three quarter-percentage point reductions projected by the Fed. The options market also sees a higher chance that short-term borrowing costs will be higher by year-end than the current level between 5.25% and 5.5%. This suggests that parts of the financial market are preparing for the possibility that the Fed's rate-cut projections may be off and that policymakers might need to hike rates again by December. Signs of persistent U.S. inflation in recent data have also contributed to this view. Oil futures have been on a four-day rally, while Treasury yields have reached their highest levels since November. The Dow Jones Industrial Average has closed lower for the third straight session.
#OptionsTraders #FederalReserve #RateHike #OilRally #UsEconomicData
https://www.morningstar.com/news/marketwatch/20240403296/options-traders-see-rising-risk-of-fed-rate-hike-following-oil-rally-solid-us-data
==========
Options traders are seeing a rising risk of a Federal Reserve rate hike following an oil rally and solid U.S. economic data. Barclays strategists note that rates markets are now positioned for the possibility of fewer rate cuts than the three quarter-percentage point reductions projected by the Fed. The options market also sees a higher chance that short-term borrowing costs will be higher by year-end than the current level between 5.25% and 5.5%. This suggests that parts of the financial market are preparing for the possibility that the Fed's rate-cut projections may be off and that policymakers might need to hike rates again by December. Signs of persistent U.S. inflation in recent data have also contributed to this view. Oil futures have been on a four-day rally, while Treasury yields have reached their highest levels since November. The Dow Jones Industrial Average has closed lower for the third straight session.
#OptionsTraders #FederalReserve #RateHike #OilRally #UsEconomicData
https://www.morningstar.com/news/marketwatch/20240403296/options-traders-see-rising-risk-of-fed-rate-hike-following-oil-rally-solid-us-data