Eurodollar contracts suggest rate hike a ways off

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NEW YORK (MarketWatch) -- Even as equities and Treasurys sold off following the Federal Reserve's meeting minutes Wednesday, eurodollar futures contracts suggested that investors were not expecting a hike to the central bank's short-term interest rate any time soon. Certain eurodollar futures contracts held at record highs for those contracts after the Fed's minutes suggested the central bank was considering ways to scale back its bond-buying program. The contracts, which trade based on the projected path of the Fed's short-term policy rate, have priced in expectations in recent sessions that the central bank will keep interest rates low for the foreseeable future as the economic recovery gathers steam. The June 2015 contract (EDM5) has an implied fed funds rate of 0.56%. The rate, which moves inversely to price, is at its lowest on record, which goes back to 2005, according to FactSet. The March 2015 contract (EDH5) has an implied rate of 0.46%, while the December 2014 contract (EDZ4) has an implied rate of 0.36%, both the lowest on record.