Rising oil prices impacted expectations of interest rate cuts, resulting in a $10 million profit for Federal Reserve option bets.

According to Mars Finance, citing Jinshi, the sharp rise in oil prices this month and the downward revision of market expectations for the Federal Reserve's easing policy have resulted in a $10 million profit from an options trade targeting short-term interest rates. This bet was placed in January in the form of options linked to the overnight funding rate, which is closely correlated with the Fed's policy direction. Last week, the bet was triggered by the Middle East conflict, which caused oil prices to rise to their highest level since 2022, sparking concerns about inflation and prompting traders to expect the Fed to maintain higher interest rates for a longer period.