Fed Funds Futures Point to Significant Probability of Rate Cut - May Want to Lock in CD Rates - The Economy Article - interest rates, fed funds rates, fed funds futures

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Fed Funds Futures Point to Significant Probability of Rate Cut - May Want to Lock in CD Rates

Article Submitted by: Sol Nasisi
The Economy

Tags: Interest rates, Fed funds rates, Fed funds futures.

As late as Friday, it looked like a virtual lock that the Fed would keep rates at 2%. But the activity of the last couple of days has dramatically increased the odds the Fed will lower rates. If you are thinking of opening a CD, now may be a good time.

Submitted: Sep 16, 2008 Views: 84 Comments: 0 Likes: 1

As late as Friday, it looked like a virtual lock that the Fed would keep rates at 2%. But the activity of the last couple of days has dramatically increased the odds the Fed will lower rates. The chart below shows the probablities for rate changes. Look at the spike in probability for rates being lowered to 1.75% and even 1.5% and the drop in the probability of rates staying at 2%. There is now a greater than 50% change that rates will come down.

If you are thinking of opening a CD, now may be a good time. CD rates, savings rates, and money market rates will drop if the Fed lowers the Fed Funds rate.

For an ongoing discussion of interest rates and where they are going, please visit my Fed Funds Rate discussion page.

SeptemberFedMeetingProbabilities

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