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Powell to Deliver Speech on Friday Night, Some Traders Lower Rate Cut Expectations
Summary: According to reports, Federal Reserve Chairman Powell will deliver a key speech at the annual gathering in Wyoming this Friday night Beijing time. Meanwhile, higher-than-expected inflation data has led some traders to lower rate cut expectations, while still maintaining the judgment of a rate cut next month. Ian Lyngen, head of US rate strategy at ...
According to reports, Federal Reserve Chairman Powell will deliver a key speech at the annual gathering in Wyoming this Friday night Beijing time. Meanwhile, higher-than-expected inflation data has led some traders to lower rate cut expectations, while still maintaining the judgment of a rate cut next month.
Ian Lyngen, head of US rate strategy at BMO Capital Markets, stated in a research report that as the market prepares for Powell's speech at Jackson Hole, the biggest risk facing the US bond market is that the Fed Chairman may dampen expectations of a rate cut in September.
Currently, there are approximately 325,000 options positions (costing about $10 million) that could profit up to $100 million if the Fed cuts rates by 50 basis points at the September policy meeting. In addition, current market pricing indicates an 80% probability of a 25 basis point rate cut at the September 16-17 meeting.
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Link: Powell to Deliver Speech on Friday Night, Some Traders Lower Rate Cut Expectations [Copy]
