Journal Article

An option for anticipating Fed action


Abstract: Options contracts on federal funds futures, a new financial instrument introduced earlier this year, can be analyzed to gauge public expectations of future Fed actions. The real bonus is that they can detect differences of opinion when markets see more than two possible outcomes for an FOMC meeting as well as the likelihood associated with each.

Keywords: options; Federal funds rate; Federal Open Market Committee;

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Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2003

Issue: Sep

Order Number: 1