Traders are paring bets on expected Federal Reserve policy tightening in June in the dovish aftermath of the Wednesday gathering after Chair Jerome Powell appeared to push back on even larger hikes in the near time. Short-end Treasury yields and the dollar dived.
Interest-rate derivative contracts tied to Fed meeting dates briefly priced in even odds of a 75-basis-point rate increase at the next meeting after this week’s half-point rate hike -- but the move subsequently proved short-lived as Powell appeared to sideline the idea of an imminent move of that scale.
