The Basics #8: Money Curves
Money or forward rate curves like eurodollar futures or now term SOFR futures are hedging instruments. The ways in which these derivatives are employed, and how they end up being structured in the market, is a deeply fundamental process. While these may be “just” hedges, when enough in these gigantic marketplaces begins to hedge in the same way and at the same time for what must be the same reasons, it is time to pay close attention.
