Traders are starting to bet that the Fed will cut interest rates sharply at least once before the end of the year.

On October 16th, traders began betting that the Federal Reserve would cut interest rates sharply at least once before the end of the year, convinced that policy may be more aggressive than other market watchers currently expect. Recent trading activity in options linked to the Secured Overnight Financing Rate (SOFR) shows that the market is increasing its bets on a half-percentage-point rate cut, possibly at this month's later meeting or the December meeting. This expectation exceeds the two 25 basis point rate cuts currently priced into interest rate swaps. Due to the prolonged U.S. government shutdown, the release of key employment and other economic data has been delayed. Once the deadlock is resolved, a large amount of data will emerge, revealing the latest changes in the economic situation. Some expect the data to further show economic weakness, thereby supporting more rate cuts. (金十) [律动]