‘Trump slump’ hedges rise on rate cut fears
One dealer notes fivefold increase in number of clients hedging against possibility of faster rate cuts
Swaption and Treasury future option trades are gathering pace as a growing number of clients hedge against a quickening of US interest rate cuts, dealers say.
Nervous investors have increased buying of calls on SOFR futures and five- and 10-year Treasury futures, and receiver swaptions, to guard against an economic slowdown that would force the Federal Reserve to reduce rates faster than previously expected.
Flows into May federal fund futures have increased, says Ed Acton, director of rates
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