March 8 (Reuters) - Traders of short-term U.S. interest rates brought forward their expectations for the timing of the Federal Reserve’s first rate hike into late 2014, after a U.S. government report showed the unemployment rate fell to a four-year low in February.
Fed funds futures contracts fell after the report, which showed U.S. employers added 236,000 jobs, more than the 160,000 expected. The jobless rate fell to 7.7 percent, from 7.9 percent.
Before the Fed released its policy statement, futures prices suggested they saw the Fed first hiking rates in January 2015, 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.
Rate futures contracts fall when traders see a greater chance the Fed will hike rates sooner.