Traders are pricing in a better-than-even likelihood that the Federal Reserve will back away from an aggressive, 75-basis point rate hike for December. They now see a 52% chance of a 50-basis-point rate hike by the Fed at its final meeting of the year, and just a 46% likelihood of a 75-basis-point move, according to the CME FedWatch Tool. That’s a turnaround since Monday, when the chance of a half-point December move was 43% and of a three-quarters-of-a-point move was 55%. The last time that the Fed hiked rates in a half-point increment was in May. The recalibration of expectations was accompanied by an aggressive drop in yields across the Treasury curve, with the 10-year rate TMUBMUSD10Y,
Source: Marketwatch
