Citi: The attractiveness of betting on the Fed skipping a rate cut in December

Citigroup analyst Jabaz Matai said that, given the current market odds, it is attractive to bet that the Federal Reserve will not cut interest rates again in December. The market generally expects the Fed to cut interest rates by 25 basis points this week, but given a series of recent strong economic data, this may be the last rate cut of the year for the Fed. His latest report suggests conducting swap transactions where traders agree to pay a fixed annualized interest rate of 4.404% and receive interest floating with the Fed's target rate. If the Fed does not lower its rates in December and keeps them between 4.5%-4.75% before year-end, this transaction would yield returns.