Traders Lift Bets On One More Rate Hike This Year Up Above 50%

Traders on the federal-funds futures market ramped up their bets for one more rate hike this year to above 50%, according to CME Group data. 47% of the odds were on a quarter-percentage point point hike for the Dec. 13 policy meeting, and 3.4% of the odds were for a half-percentage point hike. This was in sharp contrast to last Friday's reading of a 37.4% chance of a bump to interest rates. The shift in sentiment in favor of monetary tightening comes in the wake of a raft of stronger-than-expected economic data led by retail sales and Fed President Dudley's comments on Monday suggesting he would not rule out a rate hike for this year. The 2-year Treasury yield , sensitive to the outlook for central bank policy, have risen about 5 basis points this week. The increase in odds for a rate hike have also helped lift financial stocks. The Financial Select Sector SPDR ETF climbed around 1.8% this week-to-date, while Goldman Sachs rose 2.3% over the same period.