July 26, 2017 / 6:19 PM / a year ago

Traders pare bets on December Fed rate hike

(Reuters) - U.S. short-term interest rate futures rose on Wednesday, reflecting reduced expectations that the Federal Reserve will raise interest rates further this year after the central bank said it would begin to reduce its balance sheet relatively soon.

Within minutes of the Fed announcement traders were giving a rate hike by December only a 40 percent chance, based on a Reuters analysis of fed funds futures traded at CME Group. Traders had earlier in the day given a slightly less-than-even chance of a rate rise by the end of this year.

Reporting by Ann Saphir; Editing by Meredith Mazzilli

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