NEW YORK, Aug 29 (Reuters) - U.S. interest rates futures rose on Tuesday as traders scaled back their view the Federal Reserve would raise key overnight borrowing costs in December following North Korea’s missile launch over northern Japan.
Pyongyang’s latest move stoked worries about fresh tension between North Korea and the United States and ignited a sell-off in stock markets worldwide.
U.S. President Donald Trump said “all options are on the table” as Washington considers its response.
Typically, concerns about global instability’s impact on domestic business activities have raised speculation whether Fed policymakers would delay interest rate increases in an effort to help soothe jittery investors.
At 9:27 a.m. (1327 GMT), federal funds futures suggested traders saw a 32 percent chance that the U.S. central bank would raise short-term rates at its Dec. 12-13 policy meeting, down from about 40 percent late on Monday, CME Group’s FedWatch tool showed. (Reporting by Richard Leong; Editing by W Simon)