Recent market sentiment, influenced by robust U.S. economic data and hawkish remarks from policymakers including Jerome Powell, indicates a shift in expectations regarding U.S. Federal Reserve interest rate policies. Initially, markets anticipated multiple rate cuts throughout the year; however, current analyses and options market data suggest a growing likelihood of rate hikes instead. Analysts from Piper Sandler and PGIM highlight these factors as key drivers of this change. The options market now reflects a 20% chance of a rate increase within the next 12 months, a significant adjustment from earlier predictions, with traders increasingly betting on rate hikes.
Options market now implying a 20% chance that the Federal Reserve will raise interest rates within the next 12 months. We've gone from 6 cuts to 4 cuts to 3 cuts to 2 cuts to 0 cuts to a rate hike in half a year 😂 https://t.co/YWbsMAsXsb
Indian rates traders have pushed back expectations for an interest-rate cut way too far and that creates an opportunity in the swaps market, according to Bank of America https://t.co/4ecCeKAXfw
Traders in the US interest rates market have started to put on wagers that the Fed will refrain from cutting borrowing costs this year. https://t.co/wD1n4Qz4MC
Markets starting to see an outside chance of rate HIKES in 2024.. I am no longer the mad-man I sounded like a few months ago Full piece here: https://t.co/EItLan0qDO https://t.co/cMXIOyFUUN
“Options markets now suggest a roughly one in five chance of a US rate *increase* within the next 12 months, up sharply from the start of the year, according to analysts.” https://t.co/UZyQ5RLCrv
Traders have built up bets that the US Federal Reserve could raise interest rates again, a once-unthinkable prospect that highlights a shift in market expectations https://t.co/P0wY2VgVgm
💡Recently, robust U.S. economic data and hawkish remarks from policymakers have heightened market speculation about potential Federal Reserve interest rate hikes. According to analyses by Piper Sandler and PGIM, the likelihood of the Fed raising rates within the next 12 months…
Investors price in growing chance of another Federal Reserve interest rate rise via @FT https://t.co/2zVBt6veMu
The market is now pricing in a higher likelihood that Jerome Powell and the 🇺🇸 Fed DO NOT cut rates at all this year than the probability they cut 3+ times - Bloomberg https://t.co/5m64Rw5oPJ