The probability that us interest rate traders expect the fed to raise interest rates by 25 basis points in June next year has risen to nearly 50 per cent.
Interest rate swaps show that the market expects the Fed to raise interest rates by about 12 basis points at its June meeting. The chance of a 25 basis point increase in September is expected to be 100 per cent, followed by a second hike no later than February 2023.
Meanwhile, the yield on the two-year Treasury note rose as much as 4 basis points on Friday, breaking 0.40 per cent for the first time since March 2020. Interest rates rose by as much as 10 basis points in Eurodollar futures trading, reflecting rising expectations of a Fed rate hike. The trend accelerated after data showed that retail sales grew faster than expected in September.