With respect to future fed policy, here is an update in the fed funds futures for what is priced in for rate hikes in 2010. Odds of a 25 bps hike by the April meeting is now down to 28% vs 54% priced in just prior to yesterday’s FOMC statement release. Last Monday, the market had priced in a 90% chance of a hike by April. For the following June meeting, odds are down to 82% of a 25 bps hike to .5% down from 100% priced in midday yesterday and from a 64% chance of a total of 50 bps in hikes by June priced in last Monday. It is not until the August meeting now that the fed funds futures are fully pricing in a 25 bps hike. Inflation expectations in the 10 yr TIPS is up another 2 bps today to 2.14% and also is higher by 2 bps in the 5 yr to 1.79%.
Read this next.
Previous PostRock & Roll!