Fed Hike No Longer Certain for Traders as Bank Woes Spur Bonds
Short-end market rates tumbled Tuesday as a renewed slide in US regional bank shares sent Treasuries surging as investors scurried toward haven assets.
Swap contracts for June are now pricing in a central bank benchmark just 21 basis points above the current effective fed funds rate, implying around a four-in-five chance of a hike at one of the next two policy meetings. They had previously this week been pricing May as a near certainty and some possibility of an additional increase in June.
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