Traders keep bets on December for first Fed rate hike

[WASHINGTON] US short-term interest-rate futures contracts rose on Thursday as traders stuck to bets the Federal Reserve will raise interest rates just once this year, in December, after a weaker-than-expected government report on US jobs.

Futures contracts show that traders still see December as the first Fed meeting when a rate hike is more likely than not, based on CME FedWatch, which tracks expectations using its Fed funds futures contracts.

Traders see a 51 per cent chance of a December rate hike, down from 57 per cent just before the report was published. The report showed US employers added fewer jobs than expected in June and May, and a drop in the unemployment rate reflected an exit of workers from the labor force.

The Fed has kept short-term rates near zero since December 2008.

REUTERS