Traders add to bets on Fed rate hikes after inflation report

(Reuters) – U.S. short-term interest-rate futures fell on Wednesday after a government report showed consumer prices rose faster than expected in January.

The move points to added conviction the Federal Reserve will raise rates twice this year as inflation firms, and an increasing chance of a third rate hike, based on a Reuters analysis of Fed funds futures contracts traded at CME Group Inc. (NASDAQ:) Traders continued to expect the first hike of the year to come next month, giving it about a 88 percent chance.

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