Traders’ actions translate into interest rate decision probabilitiesWhen the Fed changes interest rates it’s actually changing what’s known as the federal funds rate target range. The federal funds rate is the interest rate banks charge each other to borrow money, and it impacts the interest rate consumers pay for a variety of loans, including some mortgages. But it wasn’t until 2013 that the CME Group launched the FedWatch tool, giving everyone access to the information without having to do complex calculations. In this case, they’re betting on how the Fed will adjust interest rates at its upcoming meetings. Why the FedWatch Tool is so closely followedThe Fed’s interest rate decisions can have serious implications for your investments.

Source: CNN September 20, 2023 17:37 UTC