| June 7
June 7 Traders of short-term U.S. interest rate
futures continued to expect the Federal Reserve to hold rates
near zero until early 2015 after a government report on Friday
showed the U.S. economy added slightly more jobs than expected
in May but the unemployment rate ticked up.
Fed funds futures contracts rose and then quickly fell back
again after the report, which showed U.S. employers added
175,000 jobs, just above the median forecast in a Reuters poll.
The unemployment rate rose to 7.6 percent, from 7.5 percent.
The Fed has said it will continue buying assets until there
is substantial improvement in the labor market outlook.
Futures prices before the report suggested traders saw about
a 56 percent chance of a rate hike in January 2015; after the
report the figure stood at 57 percent, according to CME Group's
Fed Watch, which generates probabilities based on the price of
fed fund futures traded at the Chicago Board of Trade. Traders
gave a 49 percent chance of a hike in December 2014.
The Fed has held its target rate for overnight lending
between banks near zero since December 2008 and says it plans to
keep it there as long as the U.S. unemployment rate remains
above 6.5 percent.