Wrightson ICAP write today that.................>

FED: Wrightson ICAP write today that negative-implied rates in futures markets

"pose a problem for the Fed" even though "negative overnight rates are extremely

unlikely to materialize", and despite how adamant Fed officials have been that

negative rates are not appropriate policy in the US.

- The problem is: "The longer the Fed is perceived to tolerate negative quotes

in the futures market, the more widespread the conviction that overnight rates

will indeed turn negative will become. And if that expectation becomes deeply

entrenched, the cost of disappointing the market later this year will rise."

- In short, the Fed "needs to regain control of the overnight rate narrative".

They write that it is possible the April FOMC minutes (released May 20) will

"shoot down any market expectations of negative rates", but warn that the

minutes rarely give unequivocal guidance about future policy decisions.