This is a good day to talk about the Fed funds rate and Fed funds rate futures. Traders can buy and sell futures based on the Fed funds rate and expectations for changes in that rate. If you think the Fed will raise rates in the future you would sell these futures and if you think the Fed will lower rates, you would buy these futures contracts. These are a great way for institutional traders to hedge interest rate risk and speculate on changes in the future.

The Fed funds futures can be useful for forex traders to understand what market expectations are for the long term trend. For example, right now traders are expecting no change in the short term but up to a .50% rate hike by the end of the year. Sudden shifts in the futures prices can also reveal important market instabilities that can turn into opportunities in the forex. In the video, I will show you where this information comes from and how to analyze it and use it in your own decision making processes.