Traders predict that the federal funds terminal interest rate is expected to rise to about 5.4% in July from about 5.38% before

It is reported that swap traders continue to price the expectation that the Federal Reserve may raise the policy interest rate by 25 basis points in the next three meetings. Traders expect the federal funds terminal interest rate to rise to about 5.4% in July from about 5.38% earlier.

Interpretation of this information:

The message reports on the current state of the swap market and its predictions regarding the Federal Reserve’s policy interest rate. Swap traders expect that the Federal Reserve will increase the policy interest rate by 25 basis points over the next three meetings. This is significant as it indicates the confidence that traders have in the Federal Reserve’s actions and its ability to positively impact the economy.

Moreover, there is a projected increase in the federal funds terminal interest rate. Traders expect the rate to rise from about 5.38% to 5.4% in July. The federal funds rate influences the rates at which banks lend and borrow money, which, in turn, affects the overall economy. It is likely that this projected increase will have a positive impact on lending and borrowing activities as it is indicative of a strong and growing economy.

Overall, the message suggests that traders have a positive outlook on the state of the economy, which is reflected in their predictions. The projected rate increase indicates that the Federal Reserve’s actions are effectively stabilizing the economy and providing a favorable environment for traders to operate.

The three keywords which sum up the content are: Swap traders, policy interest rate, and federal funds terminal interest rate. These are the key factors that impact the economy and are closely watched by traders and investors alike.