Fed-funds futures contracts suggest traders now expect the Fed to lift interest rates this month. Currently, the market shows a +80% probability for an increase on March 15, more than double the probability accessed on Tuesday.
For anyone looking for significant clues to the future of Fed policy, yesterday’s FOMC statement was a real letdown. The announcement mostly reflects U.S policy makers’ caution in a time of political upheaval. Nevertheless, the Fed indicated that they remain on track to gradually raise short-term interest rates this year.
New U.S President elect Donald Trump continues to have a massive impact on capital markets.
Global bond markets have lost more than $1 trillion in value; their worst rout in 18-months, on investors bets that Trumps new administration would boost business investments and spending while firing up inflation.