Fed Funds Futures Traders Are Betting On A Prime Rate Increase At The End of March

The folks who trade in Fed Funds Futures are now predicting a 94% chance that The Federal Open Market Committee (FOMC) will raise the Federal Funds Target Rate by another 25 basis points (0.25 percentage points) when The FOMC meets on March 28, 2006 (this, of course, would translate to a 0.25 percentage point increase to the Wall Street Journal Prime Rate [a.k.a. The U.S. Prime Rate].)

The March 28, 2006 FOMC meeting will be the second FOMC meeting for 2006 (the first occurred on January 31, 2006.) The third FOMC meeting for 2006 is set to occur on May 10, 2006, and Fed Funds Futures traders are now predicting a 62% chance that The FOMC will raise the Fed Funds Rate by yet another 25 basis points at the May 10 meeting.

The above referenced odds change on a regular basis (depending on myriad economic indicators) so stay tuned for the latest odds.

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