«The expectation of
future Fed rate hikes and increased borrowing by the U.S. Treasury is putting upward pressure on interest rates.
Federal Reserve officials at their January meeting believed that improving global economic prospects and the impact of the recently passed tax cuts had raised the prospects for economic growth and
future Fed rate hikes in 2018.
Not exact matches
Investors were not expecting the
Fed to hike
rates but were looking for signs of how quickly the central bank may move in the
future.
He said the
fed funds futures indicated 2.3 quarter - point rate hikes this year and after the Fed statement, the futures were barely chang
fed funds
futures indicated 2.3 quarter - point
rate hikes this year and after the
Fed statement, the futures were barely chang
Fed statement, the
futures were barely changed.
Traders are still pricing in two
rate hikes this year, based on the price of
Fed funds
futures contracts traded at CME Group (cme) Chicago Board of Trade.
But the lack of any statement about when the next one would happen moved markets that trade in
future interest
rates hikes, causing the price of so - called
Fed funds
futures to drop.
Some investors had anticipated the
Fed would also take a more hawkish tone on
future rate hikes on expectations of stronger growth.
Also, notwithstanding a silly fiscal policy and the ongoing political impasse, the U.S. economy has some very good things going for it now, as even king of doom, Nouriel Roubini, couldn't help but note: the
Fed is going to stick to its asset - buying regime for the foreseeable
future, providing a monetary protein shake the recovery still very much needs; the housing rebound is well on its way, which is helping Americans rebuild their wealth and is boosting employment in many states with high jobless
rates; and the shale oil and gas revolution continues to power investment, job creation and revenue growth.
Then again, the more the market falls on the fear of an interest
rate hike, the less likely it becomes that the
Fed will pull the trigger on it in the near
future, which will then push prices back up.
Critics have worried that the
Fed has missed opportunities to normalize policy, but Yellen said «the risk of falling behind the curve in the near
future appears limited, and gradual increases in the federal funds
rate will likely be sufficient to get to a neutral policy stance over the next few years.»
Dissenters from the committee's doves have worried that keeping
rates so low might force the
Fed's hand in the
future and cause economic and market disruptions.
The 30 - day
Fed Fund
futures can be used as a guide to predict when the
Fed might increase interest
rates since the prices are an expression of trader's views on the likelihood of changes in U.S. monetary policy.
The
Fed under Yellen has carefully stripped its policy statement of most
future - oriented promises to keep
rates low, along with ending crisis - era asset purchase programs.
The same was true in the
futures market, where traders place bets on what they think the
Fed's
rate will be.
This week brings a wide range of data on the state of the U.S. economy, while investors will also have multiple opportunities to try to gain further insight into the thinking of
Fed officials on
future interest
rate decisions.
Markets anticipate at least two more interest
rate hikes this year after an increase in March, according to CME Group
fed funds
futures.
According to the CME Group,
Fed futures markets are indicating a 93.5 % chance that the
Fed moves to raise
rates after its Dec. 14 meeting.
That's why
futures markets are convinced that the
Fed will decide to raise
rates at the the next meeting.
The «
Futures Now» team discusses the rise in bonds as the
Fed looks more likely to raise
rates in two weeks.
Odds of a
Fed rate hike were about 30 percent for June on Friday, from just 4 percent the week earlier, according to
futures markets.
After the
Fed's policy statement, traders of U.S. short - term interest -
rate futures on Wednesday kept bets the
Fed will raise interest
rates at least two more times this year.
Traders in the
fed funds
futures market are assigning about a 50 - 50 chance the central bank makes one more
rate move before the end of the year.
Traders in the
fed funds
futures market, though, have shifted expectations and now don't expect the next
rate hike until at least June.
One way to gauge what the market expects in terms of short - term
rates is to look at
Fed Funds
future contracts, which allow investors to place bets on what where the federal funds
rate will be in the
future (This long - term view can influence short - term
rates).
While Yellen had hinted recently that further
rate hikes were imminent, the
Fed chair announced last week that the benchmark
rate would hold steady and that
future increases would come more slowly than the
Fed originally planned.
Yet he thinks that the estimates are just too low for them, especially since many expect that the
Fed will shed light on when
rate hikes will occur in the
future on Wednesday.
The SEP also includes the dot plot, which is an aggregated forecast of where
Fed officials see interest
rates at various points in the
future.
I will publish the entire list in a
future column, and will begin tracking its progress (or lack thereof) in order to determine if the concept of buying dividend growers can bear fruit as the
Fed raises
rates, and investors have other, seemingly safer choices for yield.
That certainly was the market reaction this morning, as the 10 - year bond yield spiked on the report, suggesting concerns about
future inflation and a more aggressive
rate - hike schedule at the
Fed.
Keep your eye on the economy, the
Fed and your credit profile to understand how federal government policymakers drive interest
rates today, and what
rate you can expect to receive both now and in the
future.
Fed Funds
futures are still suggesting the next
Fed policy change is a cut in
rates.
Those betting on the path of interest
rates in the
Fed funds
futures market see a 45 % chance of at least four increases this year, according to CME Group.
When the
Fed raises the federal funds
rate, you can expect higher interest
rates for borrowing and saving in the near
future.
That seems to be the reasoning in the
Fed funds
futures market, which is pricing in a near - certain
rate hike for the June FOMC meeting, based on CME data this morning.
Prior to the report,
futures markets pegged the likelihood of a
Fed rate hike at their September meeting at 12 %; last I checked, that's up to 18 %.
The
Fed would welcome such a development, because it would preserve more room to reduce
rates in
future downturns.
Regardless,
Fed funds
futures are currently pricing in another
rate hike for the June FOMC meeting, according to CME data.
Factors that could cause actual results to differ include general business and economic conditions and the state of the solar industry; governmental support for the deployment of solar power;
future available supplies of high - purity silicon; demand for end - use products by consumers and inventory levels of such products in the supply chain; changes in demand from significant customers; changes in demand from major markets such as Japan, the U.S., India and China; changes in customer order patterns; changes in product mix; capacity utilization; level of competition; pricing pressure and declines in average selling prices; delays in new product introduction; delays in utility - scale project approval process; delays in utility - scale project construction; cancelation of utility - scale
feed - in - tariff contracts in Japan; continued success in technological innovations and delivery of products with the features customers demand; shortage in supply of materials or capacity requirements; availability of financing; exchange
rate fluctuations; litigation and other risks as described in the Company's SEC filings, including its annual report on Form 20 - F filed on April 27, 2017.
Fed interest
rates will most likely have an impact on
future loans, but the impact is still to be determined.
If the
Fed were to remove this uncertainty by announcing that it wouldn't raise
rates any time in the foreseeable
future, companies would be more inclined to start investing in these moderate - to - low ROIC opportunities.
The result is very low long term real
rates, sluggish growth expectations, concerns about the ability even over the fairly long term to get inflation to average 2 percent, and a sense that the
Fed and the world's major central banks will not be able to normalize financial conditions in the foreseeable
future.
Briggs said the odds in the
futures market for a
Fed rate hike could shift either way, based on the minutes.
With the
Fed mandate focused on dual goals of employment and inflation, like our gracious host FS I am not seeing significant
rate increases in the near
future.
On Friday, the CME FedWatch Tool, which is based on the CME Group 30 - Day
Fed Fund
futures prices, showed a 73 percent chance that the
Fed would raise
rates just 25 - 50 basis points, if it voted to raise
rates.
, which is based on the CME Group 30 - Day
Fed Fund
futures prices, showed a 73 percent chance that the
Fed would raise
rates just 25 - 50 basis points, if it voted to raise
rates.
Bluford Putnam, managing director and chief economist at CME Group, the world's biggest
futures market operator, agreed that the
Fed's near - zero interest
rates and bond purchases helped stabilize financial markets and bolstered the economy — but only for a while.
They say the
Fed's easy - money policies, including huge bond purchases and a seven - year period of record low
rates, had diminishing effect over time and subjected the nation to side effects that could lead to serious problems in the
future.
The
Fed also claims that the effects of its monetary policies lag behind the reported data, making the current
rate hikes necessary to prevent problems in the
future.
Fed fund
futures are currently putting the odds of one more
rate hike at about 50 %.
It's also worth remembering that the
Fed will have to raise
rates in the
future, possibly before the end of 2015: