ChainCatcher message, Federal Reserve Chairman Powell will deliver a key speech at this annual gathering in Wyoming this Friday evening Beijing time. At the same time, the latest inflation data, which exceeded expectations, has led some traders to lower their rate cut expectations while still maintaining their judgment of a rate cut next month.
BMO Capital Markets U.S. interest rate strategy chief Ian Lyngen stated in a research report, 'As the market prepares for Powell's speech in Jackson Hole, the biggest risk facing U.S. Treasuries is that the Federal Reserve Chairman might pour cold water on the market's widespread expectation of a rate cut in September.'
Currently, about 325,000 options positions (costing about $10 million) are expected to yield up to $100 million if they hit a 50 basis point rate cut at the Federal Reserve's September policy meeting. Additionally, current market pricing shows an approximately 80% probability of a 25 basis point cut at the meeting on September 16-17. (Golden Ten)
