U.S. rates futures rise on Bernanke’s testimony

NEW YORK, July 21 (BestGrowthStock) – U.S. short-term interest
rates futures rose on Wednesday, posting contract highs, in the
wake of Federal Reserve Chairman Ben Bernanke’s prepared
testimony on the economy before a Senate panel.

Bernanke’s cautious outlook on the economy, while not a
surprise, reinforced the perception that U.S. central bank will
not raise policy rates until the second half of 2011. For more,
see [ID:nWALLIE6DU]

Futures on federal funds, or overnight loan of excess
reserves between banks which the Fed targets to conduct its
monetary policy, signaled traders are pricing out the
probability of the Fed raising rates in the first quarter of
2011 (FFJ1: ).

The futures market implied they expect the Fed’s first rate
increase will most likely happen in the fourth quarter of next
year (FFV1: ).

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(Reporting by Richard Leong)

U.S. rates futures rise on Bernanke’s testimony