U.S. short-term interest rate futures traders are pricing in little chance the Federal Reserve will start raising interest rates until 2012, after a government report showed the U.S. economy lost more jobs than expected in September.
Traders are pricing in zero chance of an increase in the target rate for overnight lending between banks until December 2011, and are not pricing in a better-than-even chance of an increase until the first quarter of 2012, trading in Fed funds futures at CME Group Inc.’s Chicago Board of Trade shows.
Before the report, traders were pricing in a slim chance of a Fed rise in November 2011.
The Fed’s current target interest-rate range is zero to 0.25 percent, and the Fed is widely expected to ease policy further before engaging in any rate increases.
