US Rate Futures-traders see no Fed rate hike until 2012

CHICAGO, Oct 15 (BestGrowthStock) – U.S. short-term interest rate
futures traders see the Federal Reserve delaying any increase
in rates until well into 2012, after Chairman Ben Bernanke said
he sees the case for the Fed to do more to boost the economy.

The Fed, already targeting short-term rates at between zero
and 0.25 percent, has bought $1.7 trillion of Treasuries and
mortgage-backed debt to support the economy, had been widely
expected to pump more cash into the economy by buying more
Treasuries as soon as next month even before the disappointing
report.

Bernanke’s remarks shored up those expectations, pushing
any eventual rate increase even farther into the future.

Futures traders see little chance of an increase in the
target rate for overnight lending between banks until the
second quarter of 2012, trading in Fed funds futures at CME
Group Inc’s (CME.O: ) Chicago Board of Trade shows.

Before the remarks, traders saw a slim chance of an
increase in late 2011.
(Reporting by Ann Saphir; Editing by Theodore d’Afflisio)

US Rate Futures-traders see no Fed rate hike until 2012