Daily Archives: October 25, 2005

READING TEA LEAVES IN THE NEW ERA

A day after Ben Bernanke was named successor to Alan Greenspan, traders of Fed fund futures reminded the Fed chairman-nominee that interest rates should keep rising well into next year. Or, perhaps traders are expecting Bernanke to take a tough stance on inflation by hiking rates in order to prove himself a muscular monetary hand early on. In any case, the price of the the April 2006 contract dropped today in anticipation of Fed funds rising to around 4.5% by next spring.

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