An option for anticipating Fed action

John Carlson (), Will Melick () and Erkin Y. Sahinoz

Economic Commentary, 2003, issue Sep

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 (search for similar items in EconPapers)
Date: 2003
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