The holiday and the French referendum pushed this week's report on the federal funds rate probabilities back a day, but there was nothing to get in a big rush about anyway. As of close of the trading day last Friday, "our" calculations from options on federal funds futures had the probability of another 25 basis points in June at about 91%, with the balance equally split between no change and a 50 basis point increase.
Expectations are still pretty diffuse on the October contract, which spans three meetings of the federal Open Market Committee (June, August, and September). By week end, however, the measured pace scenario -- cumulatively 75 basis points over the three meetings -- made a bit of a run. primarily at the expense of betting on a pause at 25 basis points more and the expectation of a slightly more aggressive pace of rate hikes.
Here's the data:
Download july_pdfs_053105.xls
Download october_pdfs_053105.xls