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June 26, 2005

Market Expectations of the FOMC

Mark Thoma quotes from the Chicago Board of Trade:

From :

Economist's View: The CBOT's Fed Funds Rate Target Probabilities : "[T]he CBOT 30-Day Federal Funds futures contract for the July 2005 expiration is currently pricing in a 100 percent probability that the FOMC will increase the target rate by at least 25 basis points from 3 percent to 3 1/4 percent at the FOMC meeting on June 30. In addition, the CBOT 30-Day Federal Funds futures contract is pricing in a 4 percent probability of a further 25-basis point increase in the target rate to 3-1/2 percent (versus a 96 percent probability of just a 25-basis point rate increase)."

Posted by DeLong at June 26, 2005 07:48 PM