Masters of the Universe Start to Challenge Ben Bernanke
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March 22 (Bloomberg) -- It started subtly, about a monthago, in the fed funds futures market, where investors had cometo view Federal Reserve Chairman Ben Bernanke’s word as deed:first, the August pledge to hold the benchmark rate near zerountil mid-2013; then, on Jan. 25, the extension of that targetdate to late 2014.
Investors priced fed funds futures contracts accordingly.At least they did until early February, when traders started tochallenge the Fed’s forecast ever so slightly. (The contractsare cash-settled against the effective federal funds rate forthe particular delivery month.)