March 20 (Reuters) - Traders of short-term U.S. interest rates continue to see the Federal Reserve holding rates near zero for another two years, after the U.S. central bank promised to press on with its super-easy monetary policy.
Fed funds futures contracts barely budged after the Fed released its policy statement at the end of a two-day policy-setting meeting in Washington. Some contracts maturing in mid-2014 pared earlier losses, but there was little movement in most contract maturities.
Before the Fed released its policy statement, futures prices suggested traders saw the Fed first hiking rates in March 2015, giving a 51 percent likelihood of rate rise then based on contracts traded at CME Group Inc’s Chicago Board of Trade.
The Fed has held its target rate for overnight lending between banks at 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. Unemployment fell to 7.7 percent in February.
The Fed is also buying $85 billion in long-term securities to further boost growth and hiring.
Rate futures contracts rise when traders see a greater chance of a later Fed rate hike.