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FOMC Fed Day 28 June 2007


The next FOMC interest rate announcement will be on the 28 June 2007.
CBOT Fed Watch - June 22, 2007

In advance of next week's Federal Open Market Committee meeting on June 28, the Chicago Board of Trade will be reporting daily rate change probabilities in the FOMC's federal funds target rate, as indicated by the CBOT 30-Day Federal Funds futures contract. The CBOT 30-Day Federal Funds futures contract is a key benchmark interest rate barometer that reflects the forward overnight effective rate for excess reserves that are traded among commercial banks in the U.S. federal funds market.

Based upon the June 22 market close, the CBOT 30-Day Federal Funds futures contract for the July 2007 expiration is currently pricing in a zero percent probability that the FOMC will decrease the target rate by at least 25 basis points from 5-1/4 percent to 5 percent at the FOMC meeting on June 28 (versus a 100 percent probability of no rate change).

Summary Table
June 21: 100% for No Change versus 0% for -25bps.
June 22: 100% for No Change versus 0% for -25bps.
June 25: 100% for No Change versus 0% for -25bps.
June 26: 100% for No Change versus 0% for -25bps.
June 27: 98% for No Change versus 2% for -25bps.
June 28: FOMC decision on federal funds target rate.
98% probability for no change tomorrow and 2% probability for a 0.25 drop.

Also note that in the UK the Bank of England raised its base rate from 5.25% to 5.5% on 10 May 2007.
Release Date: June 28, 2007
For immediate release

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.
Economic growth appears to have been moderate during the first half of this year, despite the ongoing adjustment in the housing sector. The economy seems likely to continue to expand at a moderate pace over coming quarters.

Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.

In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.
What the 5 minute E-mini S&P500 chart looked like on this FOMC Fed Day.