TechFlow, September 17 — On the CME's federal funds futures market, a "mystery trader" is currently hedging against a super-dovish surprise from this week's Federal Reserve decision. According to researcher Ed Bolingbroke, Monday saw the largest block trade in federal funds futures in history at the front end of the curve, involving 84,000 October federal funds futures contracts, equivalent to $3.5 million risk exposure per basis point.
CME confirmed the trade on its X platform. The price and timing of the transaction align with buyer characteristics. Given that the swap market has already fully priced in a 25-basis-point rate cut, this move may indicate the mystery trader is hedging against a potential 50-basis-point cut in Wednesday’s Fed decision.
