from Zero Hedge
With the punditry obsessing over the March FOMC meeting, where odds earlier today hit 100% of a 50bps rate hike before easing modestly (and more than 6 hikes for all of 2022)…
[…] … the real action is in the February Fed funds contract which has spiked to 13bps, suggesting 5bps of tightening relative to the effective Fed funds rate of 0.08%.
[…] Why is this notable? Because the February contract expires on Feb 28, more than two weeks before the March 16 FOMC decision. This means that someone is preparing for an intermeeting rate hike, some time before March. And plugging in the numbers, the 13bps in the Feb contract means that there is now a 30% chance of an emergency rate hike.
Impossible? Not according to Fed watcher and SGH Macro strategist Tim Duy who writes that he would “not be surprised by an intermeeting move either tomorrow Friday or by Monday. I know, this is crazy aggressive.”