TechFlow news, September 11 — According to Jinshi Data, U.S. interest rate options market data shows traders expect the Federal Reserve to cumulatively cut rates by about 150 basis points before the policy decision on January 29, 2025. Although the Federal Open Market Committee (FOMC) will hold its next meeting next week, current Fed funds futures contracts reflect only a 25-basis-point rate cut priced in, suggesting a lower probability of more substantial adjustments.
However, options trading activity linked to the Secured Overnight Financing Rate (SOFR) indicates that market participants are preparing for more aggressive easing scenarios. To achieve a 150-basis-point rate cut without inter-meeting cuts, the Fed would need to deliver at least two cuts of 50 basis points or more across its four meetings prior to January 2025. Traders widely believe such significant easing steps are unlikely to occur before the U.S. presidential election on November 5, 2024.
