Gold going much higher21 Jun 2019 21:49
Traders in the fed funds futures market made bets in record numbers this week, with the bulk of the money looking for the central bank to cut interest rates aggressively in the months ahead.
Trading volume soared to 1,293,459 million contracts Wednesday, the same day the Federal Open Market Committee voted 9-1 to keep its benchmark interest rate in a target range between 2.25% and 2.5%. However, the post-meeting statement and forecasting materials pointed to a possible cut ahead and traders cemented positions.
Traders already had been expressing strong conviction the Fed would be easing at future meetings, but that sentiment got even stronger following the meeting. The market now sees a 100% chance of a rate cut at the July 30-31 meeting, up from 85% a week ago and just 15% a month ago. For the full year, the expectation for three cuts is 66%, up from 59% a week ago and a mere 4% last month.