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A check of Fed Fund futures as far out as they trade on the CME shows the June 2015 contract at...

A check of Fed Fund futures as far out as they trade on the CME shows the June 2015 contract at 99.485 compared to the near-month (July 2012) contract at 99.83. It means traders have priced in just 35 bps of Fed tightening over the next 3 years. Who said Japan's experience won't happen here?
Comments (4)
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
     
    Many people have been saying the US is in the midst of experiencing a situation similar to Japan.
    6 Jul 2012, 09:57 AM Reply Like
  • WMARKW
    , contributor
    Comments (10275) | Send Message
     
    And the important question in my mind is this: If Japan has been stuck in this situation for the last 2 decades, and if Japan has their own Central Bank and manages their own currency, then is Japan stuck there because they DON'T know how to get out of their mess, or are they stuck there because the CAN'T get out of their mess. I suspect it is more the latter, and that suggests that there is NO AMMO left in the Fed's arsenal to deploy against our situation. And thus, perhaps it's better to stop trying to MANAGE the situation and let the debt clear.
    6 Jul 2012, 02:06 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9928) | Send Message
     
    WM,
    Precisely. The US, Japan, and the EU need to let the debt clear and let markets move to levels that non intervention will support.
    6 Jul 2012, 03:50 PM Reply Like
  • Nolesince87
    , contributor
    Comments (258) | Send Message
     
    Yen doesn't have the world reserve currency status the dollar enjoys.

     

    If that ever changed, then I would have no doubts we would repeat Japan's experience.
    6 Jul 2012, 02:49 PM Reply Like
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