Fed Rate Hike Bets Surge as TLT Put/Call Ratio Hits 0.63 Low

Citadel predicts unexpected Fed hike to end forward guidance. TLT put/call ratio drops to 0.63, with call volume tripling puts, signaling bullish long-term bond bets.

Woofun AI reports that the Federal Reserve faces a pivotal decision this Wednesday, with Chair Kevin Wash hinting at abandoning "forward guidance" conventions. Citadel Securities predicts an unexpected rate hike, suggesting Wash may inflict short-term market pain to restore Fed independence.

Conversely, the iShares 20+ Year Treasury Bond ETF (TLT) shows strong bullish momentum. The put/call ratio fell to 0.63, the lowest since May, while Tuesday’s call option volume reached 171,000 contracts, three times that of puts. Convexitas CIO Zed Francis argues that a decisive hike could collapse long-term inflation expectations, lowering yields and benefiting long-duration treasuries and tech stocks.