The options market bets that the Federal Reserve will keep interest rates unchanged for the entire year

According to Jin Ten, an increasing number of options traders are ruling out expectations for a Federal Reserve rate cut in 2026, instead betting that it will keep rates unchanged throughout the year. This trend can be traced back at least to last Friday, when U.S. employment data showed an unexpected decline in the unemployment rate. Market pricing estimates have nearly eliminated the possibility of a Federal Reserve rate cut this month.

David Robin, an interest rate strategist at TJM Institutional Services, pointed out that the probability of the Federal Reserve keeping rates unchanged at least until March has increased. New option positions are primarily concentrated in March and June contracts to hedge against the scenario of the Federal Reserve's next rate cut being delayed further.