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Federal funds futures imply a 83% chance of interest rate hike

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 15, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - A day before the Fed decision on the interest rates, the Federal funds futures contracts imply a 83% chance that the Fed will end seven years of near-zero interest rates.

    Its key policy rate has been 0-0.25% since the depths of the financial crisis in late 2008, and there are about even odds of a second rate rise by March. It is widely expected that the Fed would move rates by 25bps, which means the new policy rate would 0.25%-0.50%. However, a significant minority also believes the hike would be less than 25 bps to 0.25%-0.37.5%.

    The monthly CPI figure due for release in a couple of minutes may not have a major impact on the rate hike probability unless the number is surprisingly strong or horribly weak.
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