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At Least a Year Before Rates Rise

Federal fund futures indicate most investors think interest rates won't rise until after September 2015.

By Liz Capo McCormick, Bloomberg | Updated on October 13, 2014

Derivative markets suggest the Federal Reserve won’t raise its target interest rate until after September 2015, as comments from Vice Chairman Stanley Fischer indicated escalating concern about growth outside the U.S.

Rates on federal fund futures show the likelihood of a September rate increase fell to 46 percent, down from 56 percent on Oct. 10 and 67 percent two months ago, according to data compiled by Bloomberg. The chance of an increase in October is 56 percent. The implied yield on the December 2015 Eurodollar contract, the world’s most actively traded futures, traded at 0.82 percent, the lowest since May 2013 and down from 1.085 percent a month ago.

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