August 7, 2019 / 1:19 PM / 11 days ago

MONEY MARKETS-Traders raise bets on three more U.S. rate cuts in 2019

NEW YORK, Aug 7 (Reuters) - U.S. short-term interest rates futures rose on Wednesday, as traders increased bets that the Federal Reserve would cut key borrowing costs three more times by year-end to combat rising recession risks due to trade tensions and softening global demand.

At 8:52 a.m. (1252 GMT), federal funds futures implied traders were fully positioned for the U.S. central bank to cut rates at its Sept. 17-18 policy meeting, with a 28% chance it might lower them by half a point, according to CME Group’s FedWatch program.

The fed funds contract suggested there was an 83% likelihood the Fed may follow a possible September cut with a quarter-point rate decrease in October.

The fed funds complex implied traders see a 53% probability the Fed may cut rates by another 25 basis points in addition to possible rate cuts in September and October.

Last week, the Fed policy-makers cut interest rates for the first time since 2008.

Reporting by Richard Leong; Editing by Bernadette Baum

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