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Liquidity Insights: Market Responds to latest FOMC Rates Decisions
While the Federal Open Market Committee (FOMC) does not aim to surprise markets, it is not uncommon for participants to disagree about whether the FOMC will decide to change the fed funds rate at its scheduled meetings. These disagreements can be observed in the CME Group FedWatch tool, which estimates the probability of changes to the target fed funds rate based on the Fed Fund Futures contract. The tool calculates the probability of a future rate hike by the FOMC implied by intraday Fed Funds futures prices. In the last year, the FOMC executed a steady and well-advertised pace of rate increases. Since December ... (full story)