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30 Day Federal Funds Futures (Jan 2024)30 Day Federal Funds Futures (Jan 2024)30 Day Federal Funds Futures (Jan 2024)

30 Day Federal Funds Futures (Jan 2024)

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ZQF2024 trade ideas

Ahead of the Sept 22, 2022 FOMCAs I have been watching less and less crypto YT'rs, I have been drawn to bonds and bond data analysts as they seem to have a better understanding of overall market economic shifts and since I haven't published anything in a while, I wanted to get a brief heads up. Just a quick look at of the target rate probability ahead of the 21st of Sept, 2022 Fed meeting. Currently expected earnings show 82.0% as of today: www.cmegroup.com ------------------------------- FED RESERVE BONDS 101 ------------------------------- For those unfamiliar with how Fed Funds Futures works here is a brief description, obvious if if this is all familiar knowledge you can skip smartee The Federal Reverse Bank of NY (FRBNY) gathers funds daily of participating banks and broker dealers using a volume weighted average using the daily calculating the (E)ffective (F)ed (F)unds (R)ate (EFFR) as report by the Federal Reserve Bank of NY of participating banks and broker dealers. ZQ charts typically track the 30-Day Fed Funds Futures Contracts. The contracts unit size is $5,000,000 per contract, contracts are listed monthly, extended 36 months or 3 years of yield curve Fed Funds Futures are traded in IMM index terms as a price rather than a rate, the price is calculated in these terms: 100 - (IMPLIED RATE) = (FED FUNDS PRICE) For example, with the implied price of 4.4% as expected by April or sooner 100 - 4.4% = 95.600 If is important to remember that the (F)ederal (O)pen (M)arket (C)ommitee, (FOMC) is backwards looking and sets each contract rate during each FOMC meeting obviously, the first fed futures contract rates to be affected by a rate change would be the next deferred contract month and not the contract month in which the meeting takes place, that is why investors are looking into April 2023 yield expectations as the market tends to price in future market behavior. Obviously there are more than mechanics involved in calculating expectations besides FOMC reports such as other inflation expectations, and employment statistics, etc. =^..^=
CBOT:ZQU2023
by Miles-Maddox
4
Effective Fed Fuds 2023 - Powell's War on You Growth, Employment, Inflation - aka what's left of the Economy. 1. Employment - seeking roughly a reduction of 12 Million Jobs. 2. Growth - reduction of 50% for S&P 500 from Highs. 3. Inflation - Leads until Rate Lag breaks everything. _________________________________________________________________________________ Capital Stocks Powell - Bonds are going to see a Yield Curve Inversion, larger than usual. There is no single condition, what is the term premium on Longer Rates is what matters most. Powell - Housing will see a significant correction, we want the housing market back on a sustainable path. Powell - Equities are overvalued, period, the end. We're committed to "Price Stability" Powell - The US should not return to a Gold Standard - Digital Currency is the path. Powell - We flooded the System with Money (Digitally) by buying Bonds now we are selling them. _________________________________________________________________________________ Forward Rates are indicating he is very serious. I've warned about this for well over a year now - safe to say its come to pass.
CBOT:ZQU2023
by HK_L61
2
Fed Fund Futures - Controlled YCCWhois buying all this MBS Junk that Fred and Wilma need to sell? No One... absolutely not a soul. In fact, Fred has to buy some, yeah right, it's not working out. Balance sheet reduction (QT) remains the key metric to observe as Fred, Wilma, and Dino went Bam Bam on the Bid recently. Truly a modern stone-age family, this house of Flinstone. If I recall correctly Fred was assigned with making rubble... _______________________________________________________ The Quarry will have many landslides. Eh, Stevie?
CBOT:ZQ1!
by HK_L61
Fed Funds futures disconnected from realityThe fed fund futures seem to be disconnected from reality and in my opinion the primary driver of the markets right now. On their last meeting the Fed signaled a target rate of 1.75-2% by end of the year so over the 6 remaining meetings an average .25 rate hike per meeting. Economists think this will be a bit higher with 2x .5 hikes and 4x .25 hikes. As of today the Fed Funds futures for June were pricing in a .5 hike then a 86% chance of a .75 hike and 14% change of a 1.00 hike. last week before the June contracts were pricing in a 9% chance of .5 and 91% chance of .75. This is an extremely rapid chance in expectations with no real fundamental basis. Historically the Fed and economists forecasts estimate almost always too high. Seeing the erratic nonsensical movements in these prices leads me to believe the market is just trading on momentum and a very one sided trade. With the next FOMC May 4th we should hopefully see some return to reality with the fed funds rate and expectations to substantially drop regardless if they do a .25 or .5 hike. Either this meeting or next I expect a complete 180 reversal in sentiment.
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CBOT:ZQZ2022Long
by Yogigolf
37
Fed funds futures pricing in 5 rate hikes in 2022?Economists are forecasting anything from 3 to 7 hikes in 2022 while the Fed funds futures market appear to be pricing in at least 5 rate hikes in 2022, starting with the first, a 25bp hike, at the March FOMC meeting. The Fed's current target range is 0 to 0.25%. March futures (ZQH2022) imply a rate of 0.23 suggesting that the lower target rate will be raised from 0 to 0.25. Assuming the the Fed sticks with a 25bp increment, the futures currently are pricing in at least 5 hikes as we see May futures (ZQK2022) implying a rate of 0.565, July (ZQN2022) implying 0.79, October (ZQV2022) with 1.06 & Dec (ZQZ2022) with 1.235.
CBOT:ZQG2022
by pete9564