Interest-rate futures price in roughly 60% odds that Fed has delivered last 75 basis point hike

Traders of interest-rate futures are pricing in nearly 60% odds of a 50 basis-point interest-rate hike from the Federal Reserve in December as investors anticipate that Wednesday’s 75 basis point hike will be the last of its size for this cycle. Fed funds futures traders were pricing in 59.4% odds of a 50 basis point hike in December, compared with 34.8% odds of a 75 basis point hike, according to the CME’s FedWatch tool, a shift from earlier on Wednesday as MarketWatch reported. At the same time, traders are anticipating a slightly lower peak, or “terminal” benchmark interest rate, in May, as traders now see 5% as the most likely scenario. In a prepared statement, Fed policy makers said they hope to see inflation return to 2% “over time,” comments that were interpreted as dovish by economists and investors as U.S. stocks surged and Treasury yields, which move inversely to prices, fell.