A shift in Fed fund futures trading on Tuesday showed markets are less certain that interest rates will remain unchanged in June and that a rate hike by the end of the year is likely.
On Tuesday, there was an 84% implied market probability that the Federal Open Market Committee will leave rates unchanged at their June 25 meeting, down from 94% on Monday. Markets priced in a 16% chance for a 25bp hike, up from 6% from a day ago. Currently, rates are at 2.00%.
The shift followed a speech by Federal Reserve Chairman Ben Bernanke on Monday evening during which he promised that the FOMC would "strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as for inflation.......details
On Tuesday, there was an 84% implied market probability that the Federal Open Market Committee will leave rates unchanged at their June 25 meeting, down from 94% on Monday. Markets priced in a 16% chance for a 25bp hike, up from 6% from a day ago. Currently, rates are at 2.00%.
The shift followed a speech by Federal Reserve Chairman Ben Bernanke on Monday evening during which he promised that the FOMC would "strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as for inflation.......details
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