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Expecting a rate increase any time soon?  Don’t bet on it.  Ben has failed.  The Fed Funds Futures market is beginning to realize it (via Econoday):

“Overall, the Fed is in a holding pattern with recent developments in Europe and a soft recovery in the U.S. leaving little other option for now.  Since the April policy meeting, financial markets have pushed out when and by how fast the Fed will be tightening short term interest rates.  Specifically, the implied fed funds rate in the futures market has come down significantly for rates in late 2010 and throughout 2011.   At the end of April, traders expected the Fed to raise the fed funds rate to 0.50 percent by January 2011 and to 1.00 percent by mid-2011 and to 1.50 percent by late 2011.  Currently, traders in fed funds futures anticipate no change in the Fed’s target rate until spring 2011 and possibly not until mid-2011.”

Source: Econoday