Bond Trader Places Biggest Ever Fed Funds Bet in Futures (1)

A record-sized block trade was placed in the federal funds futures market Tuesday, just days ahead of a key set of US labor data that could shape US interest-rate expectations.

The trade was struck in the January contracts for a size of 200,000, the largest ever as confirmed by CME Group, and stood out in an otherwise calm market at the start of the year.

The motive behind the transaction is unclear. It could be related to an unwinding of existing bets or a wager that could benefit from a potential shift in market pricing for the Federal Reserve’s policy ...