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)

Comment Options
NotAtrader
Sep 17, 2025 2:38am
Permalink
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"
Reply
imjoshbrown
Sep 17, 2025 12:45pm
Permalink
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.
Reply
fx6996
Sep 17, 2025 8:03am
Permalink
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.
Reply
gabri558
Sep 17, 2025 3:00am
Permalink
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.
Reply
Bakker
Sep 17, 2025 4:45am
Permalink
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.
Reply
rosy440
Sep 17, 2025 7:50am
Permalink
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.
Reply
19monza64
Sep 17, 2025 9:47am
Permalink
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.
Reply
Twocans
Sep 17, 2025 2:44am
Permalink
'Mystery Trader Makes Record Bet' GOES IN THE SAME CATGORY Leave it to Beaver and Little House on the Prairie.
imjoshbrown
Sep 17, 2025 2:08pm
Permalink
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
Reply
DwnUndrTrdr
Sep 17, 2025 4:30am
Permalink
A) It's Zero Hedge and
B) isn't a "massive bet" and a "hedge" an oxymoron.
TheDazman
Sep 17, 2025 8:33am
Permalink
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.
Reply
Trader#BD68
Sep 17, 2025 1:01pm
Permalink
and he failed, miserably. lol
Reply
Trader#350A
Sep 17, 2025 1:03pm
Permalink
How did that turn out for him ..?????
Reply
Bakker
Sep 17, 2025 3:24am
Permalink
I guess this guy is right with Trump's man on the Fed panel for today's decision on rate.
Reply
Polimini
Sep 17, 2025 4:26am
Permalink
I'm sure some people already know what the decision will be. The rest better just not make bets, this is not the casino.
Reply
wizzytech100
Sep 17, 2025 4:28am
Permalink
Who is this mystery trader
Reply
rapidace
Sep 17, 2025 1:06pm
Permalink
in my impression, powell is pretty conservative guy, he wont make risky moves.
Reply
doodooltalai
Sep 17, 2025 9:43am
Permalink
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
Permalink
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.
Reply
Trader#620F
Sep 17, 2025 1:48am
Permalink
It's not impossible.
Reply
Trader#DFE4
Sep 17, 2025 2:16am
Permalink
That was me
Reply
planzero
Sep 17, 2025 4:08am
Permalink
I have sales in EurUsd, I hope it will go down.
Reply
Trader#2C05
Sep 17, 2025 7:14am
Permalink
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
Reply
Slattfx
Sep 17, 2025 9:03am
Permalink
Who's that ?
Reply
Trader#E3EE
Sep 17, 2025 10:15am
Permalink
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?
Reply
Trader#3B26
Sep 17, 2025 10:40am
Permalink
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
Reply
Trader#620F
Sep 17, 2025 10:56am
Permalink
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.
Reply
240z
Sep 17, 2025 11:35am
Permalink
Do ya think The President gets the numbers early ??
Reply
Trader#620F
Sep 17, 2025 11:42am
Permalink
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.
Reply
Trader#E57E
Sep 17, 2025 11:43am
Permalink
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.
Reply
Trader#E3EE
Sep 17, 2025 11:56am
Permalink
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.
Reply
quvars
Sep 17, 2025 12:08pm
Permalink
inside job?
Reply
Trader#1D43
Sep 17, 2025 8:20am
Permalink
That means there will be no cut
Reply
Trader#0CAF
Sep 17, 2025 8:56am
Permalink
It drives me crazy.
Reply
Trader#1D43
Sep 17, 2025 10:43am
Permalink
Dont tell me that this mystery trader is from Valenzuela
Reply
Trader#990D
Sep 17, 2025 12:56pm
Permalink
NQ high of day, then dump
Reply
Trader#D4BA
Sep 17, 2025 1:12pm
Permalink
good
Reply
Trader#927E
Sep 17, 2025 1:47pm
Permalink
Quoting Trader#BD68
and he failed, miserably. lol
OOF....
Reply
Trader#927E
Sep 17, 2025 1:47pm
Permalink
Quoting Trader#350A
How did that turn out for him ..?????
OOOOOOOOOOF....
Reply

  • Related Stories

Fed meeting likely to produce first rate cut of 2025. Will it keep going?
From finance.yahoo.com | Sep 16, 2025
The Federal Reserve is widely expected this week to make its first interest rate cut of 2025, but the bigger question for investors is how many more cuts could be on the way as the central bank contends with a weak job market, sticky inflation, and mounting White House pressure. One clue will come in the form of the Fed's "dot plot," a chart updated ...
Rates Spark: A dovish 25bp or a hawkish 50bp rate cut
From think.ing.com | Sep 16, 2025 | 39 comments
Wednesday will see the Fed deliver an interest rate cut, most likely 25bp. It's fully priced. So, material market impact would have to come from either a surprise 50bp cut, or commentary from Chair Powell that swings dramatically in either a decidedly hawkish or dovish direction. A 25bp cut gives room for a somewhat dovish leaning, while a 50bp cut would ...
Why the Fed's rate cut might not boost the economy
From morningstar.com | Sep 17, 2025 | 5 comments
The yield curve will reveal the bond market's confidence in how the U.S. is handling monetary policy Financial markets are weighing the risk that U.S. interest rates now will be based on political considerations. Just as the inverted Treasury yield curve in recent years didn't mean a recession was imminent, the current upwardly sloping yield curve doesn't ...
  • Story Stats