Market Commentary  8756
December, 2011 Data:

12 MONTH FORECAST
The 12 month forecast for the Fed Funds Rate is in the table at the top of this
page. Forecast-Chart.com is forecasting that the Fed Funds Rate will be
roughly 0.07% in one year. The table shows a HDTFA of 0.02% which suggests
that the January, 2013 rate could easily fall between 0.09% and 0.05%. Links to
Forecasts for many other interest rates may be found on the left side of this
page.




5 YEAR FORECAST
Will the Fed Funds Rate be higher or lower 5 years from now?

Look at the table immediately below this paragraph. Forecast-Chart.com is
forecasting a probability of 29.7% that the Fed Funds Rate will be higher in 5
years. The table shows a probability of 69.8% that the rate will be lower in 5
years. (December, 2016 rate compared to the December, 2011 rate). 48
YEARS of historical data were use to calculate probabilities for
Forecast-Chart.com's 5 Year Forecast.   Check this page each month for
updates to the 5 Year Forecast for the Fed Funds Rate. The forecast may
change substantially as a result of movement in the indicators used in the
forecasting model.

Forecast          Probability
Up                      29.7%
Down                  69.8%
Unchanged              0.5%




5 YEAR FORECAST:  Various Rates
In 5 years, how high or how low is the Fed Funds Rate likely to be?

The first line of the table below indicates that the probability of the Fed Funds
Rate being ABOVE .09% in December, 2016 is 19%. The probability of the Fed
Funds Rate being BELOW .09% in December, 2016 is 81%. Probabilities for
various other rates are shown as well.

Rate           Above  Below
.09%            19%    81%
.09%            19%    81%
.08%            19%    81%
.08%            21%    79%
.08%            25%    75%
.07%            28%    72%
.07%            30%    70%
.07%            34%    66%
.06%            37%    63%
.06%            39%    61%
.06%            41%    59%
.05%            42%    58%
.05%            48%    52%



HISTORICAL FED FUNDS RATE
Average (Last 12 Months)        0.10%.
Average (Last 10 Years)          1.97%
High (Last 12 Months)             0.17% (January, 2011)
Low (Last 12 Months)              0.07% (July, 2011)
High (Since July, 1954)    19.10% (June, 1981)
Low (Since July, 1954)      0.07% (July, 2011)

MONTHLY FED FUNDS RATE
Jan,  2011     0.17%
Feb, 2011     0.16%
Mar, 2011     0.14%
Apr,  2011     0.10%
May, 2011     0.09%
Jun,  2011     0.09%
Jul,   2011     0.07%
Aug, 2011     0.10%
Sep, 2011     0.08%
Oct, 2011     0.07%
Nov, 2011     0.08%
Dec, 2011     0.07%
























HIGHLIGHTS
The Fed Funds Rate for December, 2011 averaged 0.07%. That's 1 basis
points lower than the November, 2011 rate of 0.08%, and 11 basis points lower
than the December, 2010 rate of 0.18%.  The fall in rates from November to
December indicates that the short term rate trend has been down. If that market
trend continues, we should see an average daily rate in January, 2012 that is
close to 0.06%.

The average Fed Funds Rate for the last 12 months was 0.10%. The average
rate over the last 10 years was 1.97%.  Lower rates over the last 12 months
compared to the average rates over the last 10 years serve as an indicator that
the long term rate trend in the Fed Funds Rate is down.

The highest annual rate over the last 12 months was 0.17%. The lowest was
0.07%. The high annual rate was attained in January, 2011. The market low
was achieved in July, 2011.

Forecast-Chart.com's historical research covers Fed Funds Rate data back to
July, 1954. The average annual rate during that period of history was 5.34%.
The highest rate was 19.10%. The lowest rate was 0.07%.  The market high
was attained in June of 1981. The market low was achieved in July of 2011.
Recent rates experienced in December of 2011 are low relative to the historical
5.34% average.

This page provides a five year chart and a forecast for the Fed Funds Rate.
For links to longer term charts, look at the links under the five year chart
(above). One link opens a ten year chart. Another opens our longest term
graph on the Fed Funds Rate. Just one glance at our long term charts can
provide tremendous insight into the historical trends of the financial markets.
The data table above presents the history of the Fed Funds Rate in numerical
format.



























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Historical Fed Funds Rates
Year
Percent
Year
Percent
Year
Percent
Year
Percent
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
 1.79
2.73
3.11
1.57
3.31
3.22
1.96
2.71
3.18
3.50
4.07
5.11
4.22
5.66
8.20
7.18
4.66
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
 4.43
8.73
10.50
5.82
5.05
5.54
7.93
11.19
13.36
16.38
12.26
9.09
10.23
8.10
6.81
6.66
7.57
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
 9.22
8.10
5.69
3.52
3.02
4.20
5.84
5.30
5.46
5.35
4.97
6.24
3.89
1.67
1.13
1.35
3.21
2006
2007
2008
2009
2010
2011
 4.96
5.02
1.93
0.16
0.18
0.10
Average annual rates for the Fed Funds Rate are shown in this table: 1955 to present
__________________________________________
Average daily rate per month for Fed Funds is shown in gray.  The forecast for the  target month is
shown in green.
Fed Funds Rate - 5 Year History
Fed Funds Rate Forecast
Target Month
Forecast
HDTFA
Forecast for the average daily interest rate for
Fed Funds during the target month shown at
the left.
January 2013
0.07%
.02%
Updated Wednesday, January 11, 2012.
Fed Funds Rate Forecast
0%
1%
2%
3%
4%
5%
6%
Fed Funds Rate Forecast
Compare US Interest Rates
Current Analysis & Forecast: Fed Funds Rate
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