Traders Price In Half-Point Rate Hikes at Next Two Fed Meetings
- Swap rates for May 4 and June 15 decisions reach thresholds
- Two-year Treasury yield rises to 2.625%, highest since 2018
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U.S. short-term interest-rate traders pushed the market-implied odds that the Federal Reserve will raise rates in half-point increments in both May and June to 100% Wednesday, ending weeks in which they hovered just below that level.
A 50-basis-point increase in May would be the first since May 2000. In subsequent cycles, the U.S. central bank raised rates exclusively in quarter-point steps that were clearly telegraphed to the bond market.