Economists Bond marketFirst hikeJune 2015September 2015Fed funds rate end of 20150.92%0.57%Fed funds rate end of 20162.17%1.51% Bond traders are at odds with Wall Street economists as to when they forecast the first increase in interest rates from the Federal Reserve. Economists polled by Blue Chip Economic Indicators for the November issue see the first rate hike in June, but the bond market, as measured by federal funds futures contracts, see the first increase in September. There’s also divergences as to how high interest rates will eventually go. Economists expect the federal funds rate to end next year at 0.92% and end 2016 at 2.17%. By contrast, markets are pricing in a federal funds rate of 0.57% at the end of 2015 and 1.51% at the end of 2016. The bond market for some time has diverged with the economist consensus. That could reflect bets on more extreme positions, that by definition wouldn’t be included in median projection of economists. Steve Goldstein