Mystery Trader Makes Record Bet On 50bps Fed Rate Cut Tomorrow | Forex Factory

  • Mystery Trader Makes Record Bet On 50bps Fed Rate Cut Tomorrow

    From zerohedge.com

    With a 25bps rate-cut fully priced in tomorrow, a mystery trader made a massive bet yesterday to hedge against the possibility of a much larger 50bps cut - very much against the consensus in the market. After last week's jobless claims and CPI/PPI malarkey, there has been some rotation in the market relating to The Fed's rate-cut trajectory (with 2025 expectations declining and 2026 expectations increasing)... chart The 2025 shift has seen September odds of a 50bps cut tumbled (from almost 20% to only around 4% now) while October's odds of a 25bps cut are also falling... chart So, despite that hawkish shift, ... (full story)

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NotAtrader
Sep 17, 2025 2:38am
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My personal opinion is that anyone can make up that kind of story and watch the market's reaction to it. There is absolutely no evidence to the public proving such "Mystery Trader Making that Record Bet"
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imjoshbrown
Sep 17, 2025 12:45pm
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Quoting fx6996
{quote} INITIALLY - yes However, A 0.5% cut MAY imply to the markets that the US economy isn't that strong and a slowdown may worsen - I would expect to see an jump and reversal with 0.5% - just my guess.
Yeah I'm right there with you. Currently holding long at NYC's low of the day, and holding until ADR high, near 1.36995. Expecting a pump-and-dump today and tomorrow.
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fx6996
Sep 17, 2025 8:03am
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Quoting Bakker
{quote} If rate are reduced with 50 points $ will suffer and obviously EU will strengthen.
INITIALLY - yes

However, A 0.5% cut MAY imply to the markets that the US economy isn't that strong and a slowdown may worsen - I would expect to see an jump and reversal with 0.5% - just my guess.
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gabri558
Sep 17, 2025 3:00am
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Quoting NotAtrader
My personal opinion is that anyone can make up that kind of story and watch the market's reaction to it. There is absolutely no evidence to the public proving such "Mystery Trader Making that Record Bet"
totaly; BS article at its best.
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Bakker
Sep 17, 2025 4:45am
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Quoting planzero
I have sales in EurUsd, I hope it will go down.
If rate are reduced with 50 points $ will suffer and obviously EU will strengthen.
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rosy440
Sep 17, 2025 7:50am
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The Fed has almost “zeroed out” the reverse REPO instrument - the volume has fallen from a peak of ~$2.6 trillion (2022) to 18 billion.

What is it?
A reverse REPO is when the Fed “borrows” money from funds and banks overnight, giving them government bonds as collateral, and buys it back the next day. It is a tool to “park” excess liquidity and maintain a lower limit on short-term rates.
What the fall means:
Excess liquidity is gone - money is no longer going to the Fed.
Investors are choosing alternatives - short-term treasury bills are now more profitable (higher rate than repo)
QT (quantitative tightening) in the final phase - the Fed's balance sheet is shrinking, the liquidity cushion has almost burned out. Volatility risk - short-term rates can "shoot" during stress (reduced liquidity).
In other words, the era of “post-COVID excess money” is ending, and the market is likely to transition to a tighter regime.
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19monza64
Sep 17, 2025 9:47am
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Whether he's a genius or a madman, one thing's for sure: he just bought the most expensive, overpriced insurance policy against a hurricane... in the middle of a drought. The first to thank him will be the traders who sold him that protection, pocketing a juicy premium for an event with a probability hovering near zero.

The front-end of the curve is never boring, after all. It's just a theater of the absurd with outrageously expensive tickets.
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imjoshbrown
Sep 17, 2025 2:08pm
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Quoting imjoshbrown
{quote} Yeah I'm right there with you. Currently holding long at NYC's low of the day, and holding until ADR high, near 1.36995. Expecting a pump-and-dump today and tomorrow.
It played out very well. Check it out on my trading thread here in FF: https://www.forexfactory.com/thread/...n-live-trading
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Twocans
Sep 17, 2025 2:44am
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'Mystery Trader Makes Record Bet' GOES IN THE SAME CATGORY Leave it to Beaver and Little House on the Prairie.
DwnUndrTrdr
Sep 17, 2025 4:30am
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A) It's Zero Hedge and
B) isn't a "massive bet" and a "hedge" an oxymoron.
TheDazman
Sep 17, 2025 8:33am
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Quoting Bakker
{quote} If rate are reduced with 50 points $ will suffer and obviously EU will strengthen.
Are you sure? The market has been pricing in cuts for a while. I think a lot of people are likely to be surprised today when the market doesn't react as expected. Especially EUR/ USD -- it has been very high for months given the rate differential.
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Trader#BD68
Sep 17, 2025 1:01pm
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and he failed, miserably. lol
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Trader#350A
Sep 17, 2025 1:03pm
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How did that turn out for him ..?????
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Bakker
Sep 17, 2025 3:24am
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I guess this guy is right with Trump's man on the Fed panel for today's decision on rate.
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Polimini
Sep 17, 2025 4:26am
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I'm sure some people already know what the decision will be. The rest better just not make bets, this is not the casino.
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wizzytech100
Sep 17, 2025 4:28am
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Who is this mystery trader
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rapidace
Sep 17, 2025 1:06pm
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in my impression, powell is pretty conservative guy, he wont make risky moves.
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doodooltalai
Sep 17, 2025 9:43am
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Quoting rosy440
The Fed has almost “zeroed out” the reverse REPO instrument - the volume has fallen from a peak of ~$2.6 trillion (2022) to 18 billion. What is it? A reverse REPO is when the Fed “borrows” money from funds and banks overnight, giving them government bonds as collateral, and buys it back the next day. It is a tool to “park” excess liquidity and maintain a lower limit on short-term rates. What the fall means: Excess liquidity is gone - money is no longer going to the Fed. Investors are choosing alternatives - short-term treasury bills are now more...
beautiful and sophisticated stuff, but what was the result your analysis? we see 25bps or 50 bps? is gold overbought? we see a collapse or a rise?
Maverickady
Sep 17, 2025 12:16pm
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The pump of NAS100 is inevitable regardless of a 0.25% or 0.5% rate cut, already in a long position and hoping for a 100- 200 point move.
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Trader#620F
Sep 17, 2025 1:48am
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It's not impossible.
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Trader#DFE4
Sep 17, 2025 2:16am
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That was me
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planzero
Sep 17, 2025 4:08am
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I have sales in EurUsd, I hope it will go down.
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Trader#2C05
Sep 17, 2025 7:14am
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Quoting DwnUndrTrdr
A) It's Zero Hedge and B) isn't a "massive bet" and a "hedge" an oxymoron.
Yeap, hedge is used to reduce the interest rate risk. Apparent the author doesn’t know anything about finance
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Slattfx
Sep 17, 2025 9:03am
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Who's that ?
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Trader#E3EE
Sep 17, 2025 10:15am
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Quoting 19monza64
...theater of the absurd with outrageously expensive tickets.
lolz

The lunatic(s) in my head are still on the floor, rolling around. Laughing hysterically.

You should be President of the mighty US of A.

And only 7 posts, my friend. How about 7,000 more?
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Trader#3B26
Sep 17, 2025 10:40am
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Quoting wizzytech100
Who is this mystery trader
you'd probably be surprised if I tell you you have better odds playing roulette (black/red) and blackjack than trading in the market? it's not me, it's statistics.

in BJ, you have a 50/50 chance with each hand, the best traders in the world struggle to maintain 40-50% winrate. 92% of traders fail, 84% of gamblers fail.

You think you have an edge with these lagging indicators, they sell you theory to lure you in, and put your money. The casino is straightforward at least, the market isn't.

Don't disrespect the casinos, you have a much higher chance getting richer there, than trading forex - do your research, i'm just a lunatic giving you a life lesson
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Trader#620F
Sep 17, 2025 10:56am
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Quoting rosy440
The Fed has almost “zeroed out” the reverse REPO instrument - the volume has fallen from a peak of ~$2.6 trillion (2022) to 18 billion. What is it? A reverse REPO is when the Fed “borrows” money from funds and banks overnight, giving them government bonds as collateral, and buys it back the next day. It is a tool to “park” excess liquidity and maintain a lower limit on short-term rates. What the fall means: Excess liquidity is gone - money is no longer going to the Fed. Investors are choosing alternatives - short-term treasury bills are now more...
I'm impressed! One of the few that actually follow US repo, and as you noticed the liquidity is drying up which I have been mentioning for a while here on this site. Unless the Fed wants to see another round of bank failures, they will do something, and do something soon.
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240z
Sep 17, 2025 11:35am
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Do ya think The President gets the numbers early ??
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Trader#620F
Sep 17, 2025 11:42am
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Quoting 240z
Do ya think The President gets the numbers early ??
I think I heard that the president receives the data one day before they're released to the public. I assume the same applies to the Fed. I heard about it, but cannot prove obviously.
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Trader#E57E
Sep 17, 2025 11:43am
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The FED chief position is highly underpaid. If you want to have a better forecaster you need to 10x or 20x fold that salary what it actually pays for Powell. If that salary is so low you cannot expect more. If he is prudent and thankful who has him considered and hired he will do a 50 bps rate cut, but there should be of course some resistance from some other FED members. The minutes will enlighten us here more in some days.
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Trader#E3EE
Sep 17, 2025 11:56am
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Quoting Trader#620F
...and do something soon.
Perhaps a little piece of Irony that Powell can leave for Trump himself to Decide.

Fire up the printing press, or let them all, suicide.
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quvars
Sep 17, 2025 12:08pm
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inside job?
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Trader#1D43
Sep 17, 2025 8:20am
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That means there will be no cut
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Trader#0CAF
Sep 17, 2025 8:56am
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It drives me crazy.
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Trader#1D43
Sep 17, 2025 10:43am
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Dont tell me that this mystery trader is from Valenzuela
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Trader#990D
Sep 17, 2025 12:56pm
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NQ high of day, then dump
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Trader#D4BA
Sep 17, 2025 1:12pm
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good
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Trader#927E
Sep 17, 2025 1:47pm
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Quoting Trader#BD68
and he failed, miserably. lol
OOF....
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Trader#927E
Sep 17, 2025 1:47pm
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Quoting Trader#350A
How did that turn out for him ..?????
OOOOOOOOOOF....
Reply
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