Traders boost bets on Fed interest rate rises

(Reuters) - Traders of U.S. short-term interest-rate futures on Wednesday increased bets the Federal Reserve will raise rates a fourth time this year after the central bank dropped its longstanding pledge to stimulate the economy "for some time."

In the runup to the Fed's two-day June meeting that ended with a rate hike Wednesday, traders correctly foresaw the June rate hike and were quite confident of a rate hike in September. Traders are now pricing in a 43 percent chance of a December rate hike, up from a 37 percent chance seen before the Fed released its rate-hike decision, and see a bigger chance of slightly higher interest rates next year.

 

(Reporting by Ann Saphir in San Francisco; Editing by Chizu Nomiyama)