World News

Traders maintain bets on Fed pausing on policy till later in year

(Reuters) – U.S. short-term interest rate futures dropped but only slightly on Wednesday after the Federal Reserve wrapped up its January meeting without changing interest rates or signaling it was in any rush to do so.

Bets placed in futures contracts tied to the Fed’s policy rate continued to reflect expectations that the U.S. central bank will leave rates where they are until September, when traders see a rate cut to shore up economic growth as more likely than not.

Fed policymakers polled in December expected not to touch their target for overnight bank-to-bank lending at all in 2020, after last year lowering it three-quarters of percentage point to a range of 1.5% to 1.75%.

(Reporting by Ann Saphir; Editing by Hugh Lawson and Bernadette Baum)