Growing Number of Options Traders See No Fed Cuts in 2026
A television station broadcasts Jerome Powell speaking after a Federal Open Market Committee meeting on the floor of the New York Stock Exchange on Dec. 10.
Photographer: Michael Nagle/BloombergTraders focused on options are increasingly pricing out expectations for any Federal Reserve interest rate cuts in 2026, making wagers instead that would pay off if the central bank stays on hold all year.
The theme has been in place since at least Friday, when the latest US employment data showed an unexpected drop in the jobless rate. That all but erased the chances of a rate cut at this month’s Fed policy meeting, as measured by market prices, and prompted a growing camp of traders to push back their timing for reductions in the months ahead.