U.S. short-term interest-rate futures contracts drop after Fed

U.S. short-term interest-rate futures contracts fell on Wednesday after the Federal Reserve raised its benchmark interest rate for the first time since the financial crisis and forecast further rate hikes would be gradual.

The wording of the Fed's post-meeting statement and fresh projections from Fed officials on the future path of rates prompted traders to boost their bets on further rate hikes next year.

Fed funds futures contracts show that traders still expect the Fed to wait to raise rates until mid-2016, but are seeing increasing odds that the central bank will end up boosting rates three times before the end of next year.

Before the Fed decision, traders saw odds at about even for either two or three rate hikes during 2016