Fed Fund Futures as a Predictive Tool

Preparing for the Fed's move

Recent macroeconomic conditions have heightened anticipation that the Fed may act, perhaps sooner rather than later, to raise target Fed Funds off the historic lows of 0-25 basis points at which it has been held since December 2008.

CME Group's 30-Day Federal Funds futures contracts (Fed Funds futures) represent a direct reflection of collective marketplace insight regarding the future course of Fed monetary policy. In addition to their value as a predictive tool, Fed Funds futures also provide an efficacious means of hedging and gaining exposure to short-term interest rate risks.

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