Options Traders Flock to Wager That Fed Won’t Cut Interest Rates

Options Traders Flock to Wager That Fed Won’t Cut Interest Rates

A contrarian wager that the Federal Reserve won’t cut interest rates this year is exploding in the options market.

US option market now betting the Fed won’t cut rates at all in 2025

Traders in the US options market are throwing serious money at one idea: that the Fed is going to keep rates frozen through 2025. The bet is clear and loud. It’s tied to a put option on the December 2025 Secured Overnight Financing Rate (SOFR) futures contract. The strike price—95.6875—sits lower than the current SOFR futures price, which still factors in three quarter-point cuts before year-end. Whoever’s buying these contracts is calling bulls…