Traders boost bets on Fed interest rate rises
Reuters
Published Jun 01, 2018 09:47AM ET
Traders boost bets on Fed interest rate rises
By Ann Saphir
(Reuters) - The U.S. Federal Reserve is increasingly likely to raise rates a fourth time this year after a government report showed employers added more jobs than expected in May, bets by traders in short-term interest-rate futures showed.
Traders remain quite confident of rate increases in June and September, prices of the futures show, and see about a 36 percent chance of a rate hike in December, up from about 32 percent before the report. The Fed has raised rates once this year so far, in March. Traders also increased bets on further rate increases in 2019.
U.S. job growth accelerated in May, with employers adding 223,000 jobs, and the unemployment rate dropped to an 18-year low of 3.8 percent, Labor Department reports showed early Friday.
The strong job gains, along with 2.7 percent increase in average hourly earnings, "keeps the Fed on track for a rate hike in the next couple of weeks and maybe even keeps alive the thought there's a possibility of a fourth rate hike down the road," said David Joy, chief market strategist for Ameriprise Financial (NYSE:AMP) in Boston.
Not all at the Fed are convinced.
Though there are some signs wage growth is picking up, it is "still low," Minneapolis Fed President Neel Kashkari said after release of the employment numbers. His views are more dovish than those of most of his colleagues, and in the past he has called for waiting for faster wage growth and inflation before raising rates much further.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.