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Interest Rates May Not Rise for Years

Futures market indicates Fed won't raise interest rates anytime soonand a 25 percent chance the Fed might actually cut rates by September of this year.

By Liz Capo McCormick and Matthew Boesler, Bloomberg | Updated on June 29, 2016

Circle Jan. 31, 2018, on the calendar. That’s the soonest the Federal Reserve will next hike interest rates. At least if money market derivatives are to be believed.

Traders, who have consistently been better at projecting the path of interest rates than the Fed itself, are now pricing in a greater probability that policy makers will cut rates in upcoming meetings than raise them. They don’t assign more than a 50 percent chance of an increase until the beginning of 2018, and don’t price in a full rate hike until the final quarter of that year.

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