TREE NEWS reports: Bank of America strategists Katie Craig and Mark Cabana recommended going long the June SOFR/Fed funds basis, currently at -2.4 basis points, with a target of 0 and a stop-loss at -5 basis points. The risk to the position is an early resolution of the debt ceiling issue.
BofA Strategists Recommend Long June SOFR/Fed Funds Basis
This is a rates-basis trade, not a crypto or RWA story, so its relevance to this audience is indirect at best: it signals how sell-side desks are positioning around a debt-ceiling catalyst that has historically moved funding markets and risk appetite broadly. The call is explicitly two-sided, with the stated risk being an early debt-ceiling resolution, which makes the trade a leveraged bet on timing rather than direction. What matters is whether that resolution risk materializes, since it would invalidate the premise rather than merely dent the position.
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