© Reuters.
By Kim Khan
Investing.com – The market expects the Federal Reserve to have a low chance of driving interest rates negative in July, as the futures on Fed funds showed today.
According to Investing.com, after the July meeting of the Federal Open Market Committee, there was a 0.4% chance that interest rates would range from 0 to -0.25%.
The most likely scenario is that interest rates will be between 0.25% and 0.5%, with a half-value cut for the meeting this month fully priced in depending on futures.
Goldman Sachs (NYSE 🙂 announced today that interest rates are hovering between 0% and 0.25%, no lows since 2015.
Government bond yields dropped again today as money from risk assets flowed into bonds. The full treasury yield is now below 1%.
President Donald Trump has consistently urged the Fed to move interest rates into negative territory in line with the European Central Bank. Trump said at the World Economic Forum in Davos that he likes the idea of being paid to borrow money.
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