By Owain Johnson and Bobby Timberlake
Perhaps the most-watched U.S. financial benchmark - the Federal Funds target rate - is attracting significant new attention from traders as volatility returns to the U.S. interest rate market, after a prolonged period of stable and very low rates.
Federal Funds ((FF)) futures settle each month to a simple average of the daily Effective Federal Funds Rate subtracted from 100. The futures contract allows firms the ability to hedge short-term interest rates or to express a view on the Fed's likely direction of travel.
FF contracts with longer terms