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US RATE FUTURES-Slide on Fed commercial paper move

Tue, Oct 7 2008, 14:03 GMT
http://www.afxnews.com

CHICAGO, Oct 7 (Reuters) - U.S. short-term interest rate futures fell on Tuesday after the Federal Reserve announced a new commercial paper funding facility, which dealers anticipated might lessen the need for big cuts to benchmark lending rates.

The sell-off erased implied prospects for a possible 75 basis point Fed rate cut this month, and pushed the chances for a 50 basis point cut as low as 86 percent.

Late on Monday, futures had shown a 40-percent chance that the Fed would slash rates to 1.25 percent from 2 percent at or before its Oct. 28-29 policy meeting.

(Reporting by Ros Krasny; Editing by Tom Hals) Keywords: MARKETS RATEFUTURES FED

Ros Krasny

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