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Traders boost bets on faster pace of Fed rate hikes in 2017
December 14, 2016 / 7:11 PM / a year ago

Traders boost bets on faster pace of Fed rate hikes in 2017

Dec 14 (Reuters) - U.S. short-term interest rate futures fell on Wednesday as traders priced in a faster pace of rate hikes for 2017, after the Federal Reserve lifted its target rate for the first and only time this year.

Traders are now pricing in at least two rate hikes next year, with a good chance of third, based on the price of fed funds futures contracts traded at CME Group Inc’s Chicago Board of Trade. Before the Fed decision at the conclusion of a two-day policy meeting, traders were pricing in one to two rate hikes next year.

The price of futures contracts tied to the Fed’s benchmark policy rate moves inversely to the rate that traders expect at any given point in time. (Reporting by Ann Saphir, editing by G Crosse)

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