Traders Unwind Fed Rate Cut Bets This Year After Powell's Hawkish Stance
Portfolio Pulse from Bhavik Nair
Traders are unwinding bets on a Federal Reserve rate cut this year following Fed Chair Jerome Powell's hawkish stance. Options open interest declined sharply, indicating a pull-back from rate-cut bets. Powell suggested a possible 50 basis points rate hike this year and reiterated the central bank's commitment to a 2% inflation target.
June 27, 2023 | 7:46 am
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POSITIVE IMPACT
The iShares 1-3 Year Treasury Bond ETF (NASDAQ:SHY) closed 0.07% higher on Monday as traders unwind bets on a Fed rate cut this year.
As traders unwind bets on a Fed rate cut this year, the demand for short-term treasury bonds may increase, leading to a rise in the price of the iShares 1-3 Year Treasury Bond ETF (SHY). The ETF closed 0.07% higher on Monday, indicating a positive short-term impact.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 80
POSITIVE IMPACT
The Vanguard Short-Term Treasury Index Fund ETF (NASDAQ:VGSH) closed 0.07% higher on Monday as traders unwind bets on a Fed rate cut this year.
As traders unwind bets on a Fed rate cut this year, the demand for short-term treasury bonds may increase, leading to a rise in the price of the Vanguard Short-Term Treasury Index Fund ETF (VGSH). The ETF closed 0.07% higher on Monday, indicating a positive short-term impact.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 80