Traders are increasingly turning to US interest-rate futures where they are wagering on changes between repo rates and the federal funds rate as money-market stress
There was a wave of new activity Monday in the one-month SOFR-fed funds basis trade, which bets on future spread movements between the Secured Overnight Financing Rate — a benchmark rate based on the cost of borrowing against Treasury securities — and those referencing the fed funds rate, the weighted average of overnight rates. One side of the basis trade is the