Double Blind

Here is what the financial markets are saying what the short term Federal Funds Rate (commonly known as the ‘short term interest rate’) will be in December 2010. For those that don’t know how to read these numbers, it is calculated as 100 minus the interest rate (in percentage), so a rate of 97.5 would infer a 2.5% interest rate.

I got a fill on March 31st and April 1st, so time will tell whether this will be a good bet or not. It could very well be likely that the fed will keep the rates at zero indefinitely (in practice it’s closer to about 0.17% right now), but if in early 2010 the economy picks up a bit of steam, the Federal Reserve will want to load a few bullets in its revolver by raising rates a few notches.

This entry was posted on Tuesday, April 7th, 2009 and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.