CBOT Fed Watch - June 29 Market Close

CBOT Fed Watch - June 29 Market Close In advance of this week's Federal Open Market Committee meeting on June 30, the Chicago Board of Trade (CBOT® )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 June 29 market close, the CBOT 30-Day Federal Funds futures contract for the July 2005 expiration is currently pricing in a 100 percent probability that the FOMC will increase the target rate by at least 25 basis points from 3 percent to 3-1/4 percent at the FOMC meeting on June 30.

In addition, the CBOT 30-Day Federal Funds futures contract is pricing in a 4 percent probability of a further 25-basis point increase in the target rate to 3-1/2 percent (versus a 96 percent probability of just a 25-basis point rate increase).

Summary Table

June 23: 96% for +25 bps versus 4% for +50 bps.
June 24: 96% for +25 bps versus 4% for +50 bps.
June 27: 96% for +25 bps versus 4% for +50 bps.
June 28: 96% for +25 bps versus 4% for +50 bps.
June 29: 96% for +25 bps versus 4% for +50 bps.
June 30: FOMC decision on federal funds target rate.