10 million bets on 1 billion! Wall Street bets big on Powell's final showdown!
Something major has happened!
This Friday, the global central bank governors will gather at the Jackson Hole annual meeting, where Powell is expected to deliver what may be his last critical speech in office!
Currently, Wall Street is frenzied, betting on one outcome
The Federal Reserve will cut interest rates sharply in September!
Can you imagine? A trader directly placed a $10 million bet, buying 325,000 options contracts, wagering that the Federal Reserve will lower rates by 50 basis points (0.5%).
If they win the bet, they could net $100 million in one go!
Although last week's PPI unexpectedly rose by 0.9%, indicating that inflation has not completely calmed down, this does not deter the fervor of the funds.
Current market pricing:
Probability of a 25 basis point rate cut ≈ 80%
The “big bet” on a 50 basis point cut has become the biggest suspense
This meeting is definitely the annual spectacle.
Because this is not only Powell's last “curtain call speech,” but it may also accompany adjustments to the Federal Reserve's policy framework.
However, if Powell does not adopt the “dovish” (accommodative) stance that the market expects, it could lead to an immediate backlash in both the stock and bond markets, not to mention the cryptocurrency sector.
Especially in the interest rate-sensitive short-term bond market, it could turn volatile in an instant.
In summary: The gamblers are all in, and now we just wait for the cards to be revealed on Friday!
