Back
26 Jan 2015
Fed funds futures price in a rate hike into September/October – DBS
FXStreet (Barcelona) - According to DBS Group, Fed funds futures have pushed out their rate hike expectations into September/October, with the Fed maintaining its stance for a mid-2015 hike in rates.
Key Quotes
“Attention will fall on the FOMC meeting on 28 Jan this week. While the Fed has acknowledged the weaknesses in other major economies (Eurozone, Japan and China), it has not deviated from its guidance to hike rates in mid-2015.”
“San Francisco Fed President John Williams said that low US bond yields did not reflect US weakness but headwinds from abroad. Nonetheless, Fed Funds Futures have pushed out their rate hike expectations into Sep-Oct, and the US 10Y bond yield has been below the Fed’s 2-2.5% inflation target since 9 Jan. Indeed, the market is becoming more data dependent and it certainly did not like headline CPI falling below 1% (YoY) in Dec14 on the back of sharply weaker oil prices.”
Key Quotes
“Attention will fall on the FOMC meeting on 28 Jan this week. While the Fed has acknowledged the weaknesses in other major economies (Eurozone, Japan and China), it has not deviated from its guidance to hike rates in mid-2015.”
“San Francisco Fed President John Williams said that low US bond yields did not reflect US weakness but headwinds from abroad. Nonetheless, Fed Funds Futures have pushed out their rate hike expectations into Sep-Oct, and the US 10Y bond yield has been below the Fed’s 2-2.5% inflation target since 9 Jan. Indeed, the market is becoming more data dependent and it certainly did not like headline CPI falling below 1% (YoY) in Dec14 on the back of sharply weaker oil prices.”