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Fed Swaps Once Again Show Hike More Likely Than Not for May

Bloomberg business news
Fed’s Kashkari Warns Bank Strains Boost US Recession Risk

Pricing of swaps linked to scheduled Federal Reserve meetings now suggest that a quarter-point hike is more likely than not at the central bank’s next meeting in May.

The rate on the contract tied to that gathering rose to around 4.96% on Monday, around 13 basis points above the current effective rate on fed funds, the benchmark targeted by the central bank. The Fed tends to move in increments of 25 basis points — or multiples thereof — so that suggests odds of more than 50% that it will hike.