Barclays, Goldman’s trading strategies benefit as Fed rate cut odds drop

A few weeks ago, strategists at Barclays and Goldman Sachs advised clients to take positions that would profit as markets lost confidence in rate cuts. On Thursday (May 25), Barclays closed such positions and exited at a profit, while Goldman Sachs’ similar positions were also profitable. On May 4, Barclays advised clients to short the August 2023 federal funds rate futures, when the market reflected expectations for a 14 basis point rate cut in July. A client who sold 10,000 contracts at the recommended level made a profit of more than $15 million on Thursday when the same contracts absorbed a 25 basis point hike.