[Traders Bet the Fed's Rate-Cutting Cycle May End by Mid Next Year] Bond traders are betting that the Federal Reserve's rate-cutting path over the next year will be shallower and shorter than previously anticipated. Futures and options trading indicate that, in addition to the expected 25 basis point rate cut on Wednesday, traders now expect the Fed to have a total rate-cutting space of only 50 basis points by 2026, with most of it concentrated in the first half of 2026. SOFR options positions signal that traders are hedging against the scenario where the Fed ends its rate-cutting cycle around mid-next year and then pauses.