The Federal Reserve is on track to raise its benchmark interest rate in May another quarter of a percentage point, futures traders say, following comments from an influential US central banker that higher borrowing costs are needed to fight inflation .
US short-term interest rate futures now reflect the view that a May rate hike is more than four times more likely than not, a stronger view than before the governor’s remarks. of the Federal Reserve, Christopher Waller.
The current target range is 4.75%-5.00%, up from near zero in March last year.
“If you had told me that we were going to raise the federal funds rate by 500 basis points in a year and it would appear that nothing would happen, I would have been surprised.”, declared Waller in San Antonio, in the state of Texas.
Traders also cut bets that the Federal Reserve will reduce interest rates at the end of the year, although they continue to expect them to be lower by the end of 2023.
Source: Reuters
Source: Gestion
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