The market is showing a reverse bet: the Fed's next move is to raise interest rates rather than cut them

ChainCatcher news, according to Jinshi reports, a group of stubborn bond traders are betting against the Federal Reserve, believing that the next move will be an interest rate hike rather than a cut. This bet emerged after the U.S. released a booming employment report on January 10, contrasting sharply with Wall Street's consensus that there will be at least one rate cut this year.

Despite the mild inflation report released on Wednesday reinforcing the Fed's dovish stance and causing U.S. Treasury yields to retreat from multi-year highs, this counter-bet still exists. An institutional analysis shows that based on options related to the secured overnight financing rate, traders currently believe there is about a 25% chance the Fed will raise rates before the end of the year. Before the CPI data was released, these bets were as high as 30%. Until just over a week ago, a rate hike wasn't even being considered. Former New York Fed economist Phil Suttle expects the Fed to raise rates in September, stating, "This is not a crazy viewpoint."