Investors are stepping up bets in the options market that the Federal Reserve will lower benchmark borrowing costs at a third straight meeting next month.
Traders are looking to cash-in on the potential of a quarter-point rate cut by piling into December options linked to the Secured Overnight Financing Rate, which closely tracks the federal funds rate. The bets come as a deluge of economic data starts to trickle in after the government’s longest shutdown in history.