# Floating-rate bond

How can I extract expectations about future rates from prices of floating-rate bonds? Please, give reference to any articles, if possible. Thank you in advance.

The reason is that, theoretically, a floating rate note's price is determined only from the interest rate corresponding to the next payment/reset date, that is, ${t_{i + 1}} % MathType!MTEF!2!1!+- % feaagKart1ev2aqatCvAUfKttLearuqr1ngBPrgarmqr1ngBPrgitL % xBI9gBamXvP5wqSXMqHnxAJn0BKvguHDwzZbqegm0B1jxALjhiov2D % aeHbuLwBLnhiov2DGi1BTfMBaebbfv3ySLgzGueE0jxyaibaieYdh9 % qrpeeu0dXdh9vqqj-hEeeu0xXdbba9arpi0-irpK0dbba91qpK0-vr % 0RYxir-dbbc9q8aq0-yqpe0xbba9suk9fr-xfr-xfrpiWZqaaeaabi % GaciaacaqabeaadaabauaaaOqaaiabdsha0naaBaaaleaacqWGPbqA % cqGHRaWkcqaIXaqmaeqaaaaa!4575!$. On a floater's reset date, it is priced at par using $r\left( {{t_i},{t_{i + 1}}} \right) % MathType!MTEF!2!1!+- % feaagKart1ev2aqatCvAUfKttLearuqr1ngBPrgarmqr1ngBPrgitL % xBI9gBamXvP5wqSXMqHnxAJn0BKvguHDwzZbqegm0B1jxALjhiov2D % aeHbuLwBLnhiov2DGi1BTfMBaebbfv3ySLgzGueE0jxyaibaieYdh9 % qrpeeu0dXdh9vqqj-hEeeu0xXdbba9arpi0-irpK0dbba91qpK0-vr % 0RYxir-dbbc9q8aq0-yqpe0xbba9suk9fr-xfr-xfrpiWZqaaeaabi % GaciaacaqabeaadaabauaaaOqaaiabdkhaYnaabmaabaGaemiDaq3a % aSbaaSqaaiabdMgaPbqabaGccqGGSaalcqWG0baDdaWgaaWcbaGaem % yAaKMaey4kaSIaeGymaedabeaaaOGaayjkaiaawMcaaaaa!4C57!$. In between reset dates, it may not be priced at par, but its price is still determined using that same rate. So a floater's price should only be reflective of the rate attached to the next reset date. This is what the theory says anyway, market supply/demand may change some things.
As for rates further out than ${t_{i + 1}} % MathType!MTEF!2!1!+- % feaagKart1ev2aqatCvAUfKttLearuqr1ngBPrgarmqr1ngBPrgitL % xBI9gBamXvP5wqSXMqHnxAJn0BKvguHDwzZbqegm0B1jxALjhiov2D % aeHbuLwBLnhiov2DGi1BTfMBaebbfv3ySLgzGueE0jxyaibaieYdh9 % qrpeeu0dXdh9vqqj-hEeeu0xXdbba9arpi0-irpK0dbba91qpK0-vr % 0RYxir-dbbc9q8aq0-yqpe0xbba9suk9fr-xfr-xfrpiWZqaaeaabi % GaciaacaqabeaadaabauaaaOqaaiabdsha0naaBaaaleaacqWGPbqA % cqGHRaWkcqaIXaqmaeqaaaaa!4575!$, I don't know how you'd extract those expectations, simply because the price will reset to par when the next payment is made. Maybe if the market moves the price away from par on a payment date or sufficiently far from its theoretical value in between payments you could glean an idea of where the market thinks rates are going. But you'd have to do some research to see if that's true.