Traders Pare Bets on Fed Rate Hike This Month to 1-in-4 on Jobs

Gross: Sept. Fed Move 'Close to 100%' After Jobs Report

Traders pared wagers on a Federal Reserve interest-rate hike this month after a report showed the U.S. added fewer jobs than forecast in August.

Futures prices indicated about a 28 percent chance of a rate hike this month, according to data compiled by Bloomberg, after a Labor Department report showed employers added 151,000 positions last month, versus a median forecast of 180,000 in a Bloomberg survey of economists. That’s down from a 36 percent probability before the report’s release. The calculation is based on the assumption that the effective fed funds rate will trade at the middle of the new Federal Open Market Committee target range after the increase.

Treasury two-year notes, the coupon securities most sensitive to Fed policy, were little changed after erasing earlier gains, with yields at 0.78 percent as of 9:29 a.m. New York time, according to Bloomberg Bond Trader data.

Benchmark 10-year notes reversed earlier gains, with yields rising two basis point to 1.59 percent.