In 8 Words, Fed Governor Michael Barr Just Offered a Hint at Where Interest Rates May Be Headed
"Further policy adjustments are likely to be needed," he said.
Overview
A key gauge of where the market thinks rates are headed is the CME FedWatch survey, which polls interest rate traders. In the days leading up to the September Federal Open Market Committee (FOMC) meeting, almost 60% of those polled expected a 25-basis-point rate hike, which the FOMC delivered on Sept. 16.
While most, 78%, expect rates to stay the same at the Oct. 28 Fed meeting, an overwhelming majority of traders anticipate a rate hike when the FOMC meets on Dec. 9. Specifically, 67% expect a 25-basis-point increase, and 17% say rates will be 50 basis points higher by then.
Details
They may be taking cues from FOMC members themselves, like Fed Governor Michael Barr. In a speech on Sept. 29 in Detroit, Barr said eight words that gave a decent clue as to what he is thinking about rates.
Source
Originally published at www.fool.com.