Archived IMT (2009.06.08)

We disagree with the Fed funds markets pricing for 30% chance of a rate hike in January, which we deem to be more as a result of sharp back up in short term yields rather than a reflection of economic fundamentals. Recall that the fed funds futures were spectacularly wrong last July/August when they priced as much as 80% chance of a 25-bp rate hike occurring in September 2008which we disagreed with without reserve.