Clues to Watch On Future of Interest Rates

Broken Pie Chart

Watch CNBC or Fox Business for a short while and you are likely to see predictions on interest rates. But how would you see for yourself what the various futures markets are implying for future interest rates? Learn how you can look at the Fed Funds, Eurodollar, SOFR (Secured Overnight Funding Rate), and soon BSBY Rate futures to see into the future what market participants are currently thinking. Plus, many of you have variable-rate mortgages or home equity loans that are tied to the Libor Rate, or now SOFR or BSBY. See how to quickly recognize what the implied interest rates are on these key metrics.

How to calculate implied future fed funds rate

CME Fed Funds Probability Tracker

SOFR Secured Overnight Funding Rate

Eurodollar Futures and implied 3-month Libor rate

BSBY Rate based on CDs, Commercial Paper, Bank Deposits USD, Short term bank bond trades

Fed Funds Futures

SOFR Rate Futures

Eurodollar Futures

Mentioned in this Episode:

Derek Moore’s Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Eurodollar futures chain https://www.cmegroup.com/markets/interest-rates/stirs/eurodollar.quotes.html

SOFR Futures rates CME https://www.cmegroup.com/markets/interest-rates/stirs/three-month-sofr.html

CME FedWatch Probability Tool and Fund Funds Futures by Fed Meeting Date https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html