NEW YORK, Nov 26, Reuters - Futures on the U.S. federal funds rate, which tracks short-term interest rate expectations, went up on Friday after a new coronaviruses detected overseas rocked market sentiment and investors rethought bets that the Federal Reserve would hike rates to quell inflation.
A near cross-the- board jump in CBOE fed funds futures upended market expectations that the Fed would raise its funds rate from its current 0 0.25% as soon as mid 2022, after it finished its bond purchase program that was put in place early in the pandemic.
According to CME's FedWatch tool, there is https://www.cmegroup.com. In June of this year, com trading interest-rates countdown-to- fomc.html money market traders were pricing in a 58.5% chance of a 0.25% hike, down from an 82.1% chance Wednesday before the U.S. Thanksgiving holiday and a 67% chance a week ago.
The odds of a hike at the July meeting were 69%, down from 88% on Wednesday and 77.2% last week. The September tighter odds were at 79.7%, down from 94.5% and 88.1%.
By December 2022, the market believes that the rate will be hiked by at least 25 basis points, versus 99% the previous session and 94% last Friday.