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Fed Funds Futures Now Show Two Cuts Fully Priced In This Year
Fed funds futures contracts extended their rally in Friday afternoon trading in New York and are now indicating more than half a percentage point of interest-rate cuts this year by the U.S. central bank. While the effective fed funds rate currently stands at 2.39%, the rate implied for the end of 2019 by the January futures contract has dropped 14 basis points on the day to 1.865%. That’s more than 50 basis points lower, while central bank shifts are often done in increments of 25 basis points. The shift comes amid a worldwide rally in bonds after U.S. President Donald Trump announced his plan to levy tariffs on ... (full story)