NEW YORK (Reuters) - U.S. short-term interest rates futures held steady on Tuesday as traders stuck with their view the Federal Reserve would raise key overnight borrowing costs twice more this year after Fed Chairman Jerome Powell’s speech before a Senate panel.
At 10:27 a.m. (1427 GMT), federal funds futures implied traders priced in an 89 percent chance that Fed policy-makers would increase their target range on overnight interest rates on excess reserves by a quarter point to 2.00-2.25 percent at their Sept. 25-26 meeting FFU8, CME Group’s FedWatch program showed.
Fed funds contracts FFZ8 showed traders saw about a 63 percent likelihood of another quarter-point increase to 2.25-2.50 percent at the Fed’s Dec. 18-19 policy meeting, according to the FedWatch program.
The Fed raised key short-term rates in March and June, citing an improving U.S. economy and inflation moving towards its 2-percent goal.
Reporting by Richard Leong; Editing by Chizu Nomiyama