Traders Bet On Earlier Rate Hikes Following Fed Statement

MarketWatch Pulse

Traders who use futures contracts to bet on the pace of Federal Reserve rate hikes are wagering that the central bank will raise rates slightly earlier than it had been planning to before the Fed meeting. Fed funds futures contracts forecast a first rate hike occurring in September of next year , a month earlier than had been expected before the Fed statement was released on Wednesday. The Fed said in its latest policy release that it remained committed to a near-zero policy rate, but expressed increasing confidence in the economic recovery. The Treasury yield curve also flattened after the statement, suggesting that investors were pulling forward their expectations of the timing.

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