The intended federal funds rate has held constant at 1% for nearly a year. Nevertheless, expectations of future monetary policy have shifted significantly over this period. Among the many ways to gauge changes in policy expectations, federal funds futures provide a short-run view. Since the May meeting of the Federal Open Market Committee (FOMC), market participants have moved forward their expectations of the next round of policy tightening and now expect it to be more aggressive than before. Eurodollar futures, which provide a longer-term picture, tell a similar story.
Suggested citation: "Monetary Policy," Federal Reserve Bank of Cleveland, Economic Trends, no. 04-07, pp. 04, 07.01.2004.