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Powell Keeps Half-Point Hike Alive But Traders Aren’t Buying It

  • Fed could raise rates more aggressively if needed, Powell says
  • Traders scale back odds of 50-basis-point increase by June
Jerome Powell, on March 2, 

Jerome Powell, on March 2, 

Photographer: Julia Nikhinson/Bloomberg

Money market traders need more convincing before pricing in the largest Federal Rate rate-hike since the turn of the century later this year, despite the latest signaling from Chair Jerome Powell.

Powell left open the possibility of 50-basis-point hike -- the first since 2000 -- at this testimony Tuesday, even as he poured cold water on the idea that it could come this month. Yet the odds of such a move by May dropped to as low as 20%, about half of what they were right after his speech.