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Suppose current 30 day rates are 2%, and 60 day rates are 2.12%. Some market players like to use the fact that the 60 day

Suppose current 30 day rates are 2%, and 60 day rates are 2.12%. Some market players like to

use the fact that the 60 day rate is higher as a method to determine the probability that the

central bankers will raise interest rates by 25 bps in the next 30 days. What is your best guess

for that probability? What are the problems with this analysis?

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