Bond traders see only one Fed interest rate increase this year

New York

TRADERS are betting that two interest rate increases could be too many in 2016.

As a growth scare fuels turbulence in global markets, investors are cutting wagers on how high the Federal Reserve will raise its policy rate this year, going by derivatives prices. Traders expect the effective Fed funds rate will rise to 0.7 per cent in a year's time, implying one increase, according to data compiled by Bloomberg.