Looking forward

Forward rates

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Recent research has underlined that futures rates can often be inaccurate to a considerable degree and should not be counted on as a basis for future market expectations. The National Bureau of Economic Research, a Cambridge, Massachusetts-based think tank, said in its study1 published last year that US federal futures rates were often inaccurate because futures prices often include a substantial risk premium, which entices investors to buy the contracts even if they don’t have a strong view on