News and the Market-Implied Fed Funds Path

Ten year Treasury yield fell with the FOMC announcement, as CME contracts indicated a lower trajectory:

 

Here’s the CMEWatch implied Fed funds rates:

Figure 1: Effective Fed funds rate (bold black), futures as of 11/13 (sky blue inverted triangle), as of 12/12 (orange square), 12/13 (red square), 4:50pm CT, in %. Source: FRED, CME, author’s calculations.

 

One thought on “News and the Market-Implied Fed Funds Path

  1. Moses Herzog

    I thought the interviewers on Bloomberg were going to cry on live TV when they interviewed Jared Bernstein about how rates weren’t being raised. Or maybe the fat one heard the lunch buffet at the Bloomberg cafeteria had just closed, I don’t know.

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