Tag Archive for Fed Funds

Market’s overnight rate expectations are more dovish than the Fed’s own forecasts- Sober Look

Market expectations of the first rate hike have once again been pushed out to May of 2015.

The combination of the Fed maintaining its unprecedented monetary easing program at the September meeting as well as the assumption that Janet Yellen will be taking over for Bernanke would suggest that the central bank is farther from any rate adjustment than was expected earlier this year. In fact the market now considers the Fed to be more dovish than the Fed’s own rate forecasts would suggest.

Barclays Research: – Despite stronger than expected data, the market has pushed out hike expectations. … the market is now pricing in the Fed to hike to 0.75% by the end of 2015 vs the Fed’s [own] forecast of 1% and 1.8% by the end of 2016 vs Fed’s forecast of 2%.


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The Fed to face some challenges as it ultimately exits the unprecedented monetary expansion – Sober Look

This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission. The recently released minutes of the last FOMC meeting made some economists and market participants begin contemplating the Fed’s exit, its timing, and the implications. This is because the FOMC’s discussion sounded a bit more hawkish than many…

Much Ado About Reserve Growth

Critics of the Fed have expressed concern about the inflationary implications of the huge expansion of the Fed’s balance sheet, particularly excess reserves. The reserve bulge was created  when the Fed expanded the alphabet soup programs in 2008. At the same time the Fed began paying interest on reserves, paying 1%, which was .75% above…