Current Fed expectations for rates and when 21st of March 2018
28 November 2017 email and one current long-term trade
- Fed’s website including all press conference videos and statements
- What the Fed Funds rate is and how it’s set
- What the 3 Month rate is and how it’s set
- Fed Funds 1954-2017 chart & data each 0.01 change =$41.67 per contract
Send us a message or schedule an online review to speak with a broker who’ll answer questions and provide supporting links for additional information and/or verification.
For beginners see this trade, for more advanced traders see the links below.
1) Tracking these trades and/or experimenting with any potential outcome for them.
- Open this spreadsheet
- Enable editing
- Enable content
1.1) How to use this spreadsheet (5 minutes 41 seconds)
2) Four trades to capture the move higher in rates and the tools to track them.
2.1) Trade #1
Short ZQZ18 (December 2018 Fed Funds Futures) at 99.1650
100.0000 Represents a rate of 0.0000% (100.0000 – price = rate)
-99.1650 Subtract the contract entry price
0.8350% = Markets anticipated rate for Dec. 2018 delivery at entry
100.0000 Represents a rate of 0.0000% (100.0000 – price = rate)
-97.9000 Price at the lowest anticipated rate by the Fed by Dec 2018
2.1000% = The lowest anticipated rate by the Fed for December 2018 delivery
We’re short, positioned to capture the move lower in the ZQZ18’s contract price from 99.1650 to 97.9000. This represents an increase in the Fed Funds rate from 0.8350% to 2.1000%, the the lowest of the Federal Reserve’s expectations for this rate by the end of December 2018.
Current Chart & Quotes. Each 0.01 change in price down = +$41.67 up -$41.67
Source Federal Reserve
2.2) Trade #2 spread trade
Long GEZ17 December 2017, 3 month deposits contract specifications
Short GEZ18 December 2018, 3 month deposits contract specifications
Entry price = 0.1050, premium to December 2017
Market’s anticipated rate hikes from Dec. 2017 to Dec. 2018 at entry 0.1050%
Minimum Fed anticipated rate hikes from Dec. 2017 to Dec. 2018 = 0.7000%
We are positioned to capture the move as the spread widens from our entry at 0.1050 to the lowest Fed target of 0.7000 by December 2019.
Current chart & Quotes Each 0.01 = $25.00
Source Federal Reserve
2.3) Trade #3 spread trade
Long GEZ17 December 2017, 3 month deposits contract specifications
Short GEZ19 December 2018, 3 month deposits contract specifications
Entry price = 0.4250, premium to December 2017
Market’s anticipated rate hikes from Dec. 2017 to Dec. 2019 at entry 0.4250%
Minimum Fed anticipated rate hikes from Dec. 2017 to Dec. 2019 = 1.5000%
We are positioned to capture the move as the spread widens from our entry at 0.4250 to the lowest Fed target of 1.5000% by December 2019.
Current chart & Quotes Each 0.01 = $25.00
Source Federal Reserve
2.4) Trade #4 spread trade
Long GEZ17 December 2017, 3 month deposits contract specifications
Short GEZ20 December 2018, 3 month deposits contract specifications
Entry price = 0.4500, premium to December 2017
Market’s anticipated rate hikes from Dec. 2017 to Dec. 2019 at entry 0.4500%
Minimum Fed anticipated rate hikes from Dec. 2017 to Dec. 2020 = 1.5000%
We are positioned to capture the move as the spread widens from our entry at 0.4500 to the lowest Fed target of 1.5000% by December 2020.
Current chart & Quotes Each 0.01 = $25.00
Source Federal Reserve
3) Other US interest rate markets we trade
4) European interest markets we trade
5) Lowest of Fed expectations for rate hikes through 2019. (June 2017)
6) Median Fed expectations for rate hikes through 2019 (December 2014) however the Fed has been wrong on nearly every economic forecast and literally every rate call since 2008. The standard joke is the Fed no longer stands for Federal Reserve but failed economic policy.
7) Fundamentals
7.1) For the Fed site with all press conference videos and statements
7.2) The low end of Fed expectations call for the Fed Funds rate by December 2019 of 2.90%, 2.12% below the 60 year average.
Current Fed graph 1954 through 2017
Source Federal Reserve
7.3) A few articles I’ve written on rates, inflation and the Fed
- The Math on Why U.S. Inflation is so “Contained”
- The Only Solution To The U.S. Treasury’s Debt Crisis
- US Consumer Price Index Fact or BLS.GOV Fiction?
- Who’s Right the Market or the Fed?
- Bernanke’s Calls on the Economy Versus Reality
- 1933-1939 Versus 2008-2016
7.4) The last tightening cycle
30 June 2004 1.25% contract value $5,208
29 June 2006 5.25% contract value $21,875
Source Federal Reserve
8) Fee structure and defining overall account risk
9) Open an account for minimums of 10K to 500K USD or major currency equivalent, for account greater than 500K you can work with the majority of the firms listed on this page.
If you’d like to review this and/or other programs/markets please contact us or schedule an online review using this link, we’ll answer all your questions and provide you supporting links for additional information and/or verification.
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