A day before the Federal Reserve releases its latest interest-rate decision, U.S. forward rates are pricing in only three full 25 basis point rate increases in over two years, in contrast to the median of dot plot that indicates four hikes this year.

U.S. one-month forward rates for two years are now at 1.30 percent, compared with a high of 1.72 percent on Dec. 16, when Fed Chair Janet Yellen increased the Federal funds target rate. In the middle of September 2013, it touched 1.57 percent, following signals that the central bank could begin tapering its unprecedented quantitative easing program. The pricing reflects relative dovishness following heightened market volatility this year amid an extended slump in oil prices.

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