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Wednesday, August 17, 2022

Traders keep bets on two 2018 Fed rate hikes under Powell

Traders keep bets on two 2018 Fed rate hikes under Powell© Reuters. FILE PHOTO – Jerome Powell testifies on his nomination to become chairman of the U.S. Federal Reserve in Washington

(Reuters) – U.S. short-term interest rate futures pared earlier gains on Wednesday after Federal Reserve policymakers signaled support for continued gradual rate hikes next year, when Governor Jerome Powell is expected to take over as chairman of the U.S. central bank.

At the close of their two-day meeting, Fed policymakers delivered their third rate hike of the year as was widely expected, and fresh forecasts pointed to continued conviction that three more rate hikes will be warranted in 2018.

Traders largely stuck to their bets on two rate hikes next year, giving a March rate hike about the same 60 percent chance they saw before the end of the Fed meeting, based on a Reuters analysis of fed funds futures traded at CME Group Inc’s (O:) Chicago Board of Trade.

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Source: Investing.com

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