Fed Will Raise Rates Faster Than Investors Expect
According to most economists surveyed by Bloomberg News, the Fed will probably raise its benchmark interest rate faster than money-market investors expect.
Bloomberg notes that eurodollar futures, the world’s most actively traded short-term interest-rate contract, are underestimating the pace of tightening over the next two years, according to 55% of 56 economists in the June 12-16 survey.
Bloomberg quotes a senior economist at Deutsche Bank Securities as saying, “Investors may be focusing on the first-quarter economic contraction caused in part by unusually severe winter weather. Instead, they should be paying attention to recent signs of rebound.”
To read the entire Bloomberg article, click here.