An abbreviation for short-term interest rate futures. It is an interest rate futures contract in which the underlying is typically the three-month interest rate on a floating rate such as LIBOR, EURIBOR, etc. Some firms use short term interest rate futures a hedge toll against the risk of borrowing and/ or lending. Macroeconomically, the prices of futures contracts on short-term interest rates are usually used by central banks to gauge market expectations concerning monetary policy decisions. Yield curves and futures contracts on short-term interest rates provide good predictors of the future route of monetary policy decisions both in the short and medium terms.
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