CBOT Fed Watch - December 2003

In advance of this week's Federal Open Market Committee meeting on December 9, the Chicago Board of Trade will be reporting daily rate change probabilities in the FOMC's federal funds target rate, as indicated by the CBOT® 30-Day Federal Funds futures contract. The CBOT 30-Day Federal Funds futures contract is a key benchmark interest rate barometer that reflects the forward overnight effective rate for excess reserves that are traded among commercial banks in the U.S. federal funds market.

Based upon the December 8 market close, the CBOT 30-Day Federal Funds futures contract for the December 2003 expiration is currently pricing in a 4 percent probability that the FOMC will increase the target rate by at least 25 basis points from one percent to 1-1/4 percent at tomorrow's FOMC meeting (versus a 96 percent probability of no rate change).

This notification concludes this CBOT Fed Watch period. The next scheduled CBOT Fed Watch period will start on Wednesday, January 21, one full week prior to the next scheduled FOMC meeting on January 28.

Summary Table

December 2: 95% for No Change versus 5% for +25 bps.

December 3: 95% for No Change versus 5% for +25 bps.

December 4: 96% for No Change versus 4% for +25 bps.

December 5: 96% for No Change versus 4% for +25 bps.

December 8: 96% for No Change versus 4% for +25 bps.

December 9: FOMC decision on federal funds target rate.

The information in this document, although taken from sources believed to be reliable, does not constitute investment advice and is not guaranteed by the Chicago Board of Trade as to its accuracy or completeness, nor any trading result, and is intended for purposes of information and education only. The Rules and Regulations of the Chicago Board of Trade should be consulted as the authoritative source of all current contract specifications and regulations.