How high will we go? The market speaks, and it speaketh at least another 50 basis points. Here are the probabilities for the next two FOMC meetings, based on the usual Carlson-Craig-Melick estimates from options on federal funds futures:
Just for reference, here's the latest from the Treasury market:
Bonds fell Monday as traders prepared for possibly hawkish congressional testimony from new Federal Reserve Chairman Ben Bernanke.
The benchmark 10-year note declined 2/32 to 99-8/32 to yield 4.59 percent, little changed from the previous session. The 30-year bond declined 9/32 to 98-26/32, yielding 4.57 percent, up from 4.56 percent late Friday...
Bernanke is scheduled to testify before the House Financial Services Committee Wednesday, his first public appearance to discuss the economy and monetary policy since becoming the head central banker.
Speculation is swirling that the Fed will continue to raise interest rates to stem inflation in the face of high energy prices and a strong economy...
Swirling indeed.
If you like, the data:
Download Imp_pdf_slides_for_blog_021006-1.ppt
Download implied_pdf_march_021006.xls
Download implied_pdf_may_021006.xls