| U.S. rates futures rise as jobless rate jumps 08:49 EST Friday, November 06, 2009 | |
NEW YORK, Nov 6 (Reuters) - U.S. short-term interest rates futures rose on Friday, after the government's jobless rate broke above 10 percent to its highest level since April 1983, rekindling worries about the pace of an economic recovery.
The biggger-than-expected rise in the unemployment rate to 10.2 percent, together with a steeper-than-expected 190,000 loss in payrolls last month, led traders to raise bets that the Federal Reserve will stick to its near zero rate policy well into 2010 to keep a recovery intact. For more, see [ID:nOAT004347]
Futures on federal funds, or banks' overnight lending of their excess reserves which the Fed targets, hit contract highs immediately after the October jobs data.
Federal funds futures for July 2010 delivery
This suggested traders reduced their bets the Fed will begin raising rates in the middle of next year. The implied chances of the Fed's first rate by the mid-2010 to about 66 percent from 84 percent late on Thursday.
(Reporting by Richard Leong, editing by W Simon )