Mysterious trader bets on a 50 basis point rate cut by the Federal Reserve, CME sees the largest block trade in federal funds futures history

ChainCatcher message, there is a "mysterious trader" currently hedging against a super-dovish surprise in this week's Federal Reserve decision in the federal funds futures market at the CME.

According to researcher Ed Bolingbroke, there was the largest block trade in federal funds futures ever recorded at the front end of the curve on Monday, confirmed by the Chicago Mercantile Exchange on the X platform.

It is reported that both the price and timing of this block trade align with buyer characteristics. Given that the current swap market has fully absorbed the expectation of a 25 basis point rate cut, this move may suggest that the mysterious trader is hedging against the risk of a 50 basis point cut in Wednesday's Federal Reserve decision.