March 7 U.S. short-term interest-rate futures
contracts fell after a U.S. government report showed U.S.
employers added more jobs than expected in February, prompting
some traders to price in an earlier date for a rate hike from
the Federal Reserve.
The contracts show markets are are now assigning a roughly
53 percent chance of a first Fed rate hike in June 2015, based
on CME FedWatch, which tracks rate hike expectations using its
Fed funds futures contracts.
Before the report, the earliest meeting seen as having a
better-than-even chance of a rate hike was July 2015.
The Fed has targeted short-term rates of between zero and
0.25 percent since December 2008, and has promised to keep them
there until well past the time the U.S. unemployment rate falls
to 6.5 percent.
The unemployment rate rose in February to 6.7 percent, but
job gains were 175,000, beating expectations.