Market Prices Just One 2019 Fed Hike After Powell Remarks

While a December Federal Reserve rate increase is still largely baked in by the market, Chairman Jerome Powell’s comments Wednesday have made the path in 2019 more uncertain. As a result, the spread between December 2018 and December 2019 eurodollar futures -- a measure of how much tightening traders expect next year -- briefly touched less than 25 basis points, the equivalent of one Fed hike. That’s the lowest level in six months and less than half the gap from mid-October.