FOMC Fed Day 11 December 2007

The next FOMC interest rate announcement will be on the 11 December 2007.

More details and charts about Fed Days

In advance of this week's Federal Open Market Committee meeting on December 11, the CME Group will be reporting daily rate change probabilities in the FOMC's federal funds target rate, as indicated by the 30-Day Federal Funds futures contract. The 30-Day Federal Funds futures contract is a key benchmark interest rate barometer that reflects the forward overnight effective rate for excess reserves that are traded among commercial banks in the U.S. federal funds market.

Based upon the December 10 market close, the 30-Day Federal Funds futures contract for the December 2007 expiration is currently pricing in a 100 percent probability that the FOMC will decrease the target rate by at least 25 basis points from 4-1/2 percent to 4-1/4 percent at tomorrow’s FOMC meeting.

In addition, the 30-Day Federal Funds futures contract is pricing in a 42 percent probability of a further 25-basis point decreasein the target rate to 4 percent (versus a 58 percent probability of just a 25-basis point rate decrease).

This notification concludes this CME Group Fed Watch period. The next scheduled Fed Watch period will start on Wednesday, January 23, one full week prior to the next scheduled FOMC meeting on January 29-30.

Summary Table
December 4: 28% for -25 bps versus 72% for -50 bps.
December 5: 43% for -25 bps versus 57% for -50 bps
December 6: 50% for -25 bps versus 50% for -50 bps.
December 7: 59% for -25 bps versus 41% for -50 bps.
December 10: 58% for -25 bps versus 42% for -50 bps
December 11: FOMC decision on federal funds target rate.

This is the 5 minute chart from the last FOMC Fed Day on 31 October 2007 for the E-mini S&P500 (ES).

For immediate release

The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/4 percent.

Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time.

Readings on core inflation have improved modestly this year, but elevated energy and commodity prices, among other factors, may put upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; William Poole; and Kevin M. Warsh. Voting against was Eric S. Rosengren, who preferred to lower the target for the federal funds rate by 50 basis points at this meeting.

In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 4-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and St. Louis.

This is what the market looked like today: