Futures Market Implies Fed "Taper" To End By Early 2015
Sober Look | Jun 10, 2013 12:54AM ET
The rate curve implied by the Fed Funds futures steepened considerably over the past month. The market now anticipates the Fed will raise the overnight rate in May 2015. A month ago, the expectation was for the end of 2015 - the implied rate hike has been pulled forward.
But the Fed can't start raising rates before the end of the unconventional monetary policy measures. It means if the Fed begins to "taper" off bond buying in the next few months, it will have about one and a half years to go from $85 bn of securities purchases per month to zero.
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