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“Fed expected to dampen rate rise expectations”

Posted by
December 14, 2010
in Blog

“The central bank is not expected to signal any shift away from its intention to buy $600 billion in government debt but markets are already bringing forward expectations of when the Fed may start to raise interest rates.

Eurodollar futures fell to three-month lows this week and two-year Treasury yields are at their highest level in five months.

“We think the increase in Fed hike expectations is overdone, the market has priced in a possibility of hikes as early as the second half of 2011,” Barclays Capital strategists said.

“The FOMC is likely to reiterate its message of extremely easy policy … and that could be a catalyst for reversal of some of the recent outsized moves.”” Read more.

“Fed expected to dampen rate rise expectations”
Kirsten Donovan
Reuters, December 14, 2010.

Image by Salvatore Vuono / FreeDigitalPhotos.net.