Sep. 21, 2006. 01:00 AM
U.S. interest rate futures dealers continue to favour rate cuts from the Federal Reserve Board to start in early 2007, although the outcome of yesterday’s policy-setting meeting was not as dovish as some had hoped.
The Federal Open Market Committee left rates unchanged at 5.25 per cent and made only minor revisions to its habitual post-meeting statement. Going into the meeting, some dealers were hoping the Fed would comment more decisively on slowing inflation and moderating economic growth to set the stage for a rate cut within the next few months. “The Fed stood true to the words of Fed officials who have spoken recently and made it clear that their bias is still, if anything, toward tightening,” said Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Conn.