Which of the following tends to accurately predict the consensus opinion as to actions expected to be taken by the Federal Open Market Committee in the future?

Question

Quizplus · Accepted Answer

Federal Funds futures contracts are the most commonly used tool to predict what actions the Federal Open Market Committee might take in the future, as they are directly linked to the Federal Reserve's monetary policy decisions. The price of these contracts reflects market expectations of future Federal Funds rates, which in turn give an indication of the expected future actions of the Federal Reserve. The other options may have some predictive value, but are not as closely linked to the actions of the Federal Reserve.

Which of the Following Tends to Accurately Predict the Consensus