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Fed Traders Are Almost Back to Fully Pricing In Seven Hikes
Traders have boosted their expectations for the amount of Federal Reserve policy tightening that could occur this year and are close to fully pricing in seven standard quarter-point rate hikes. The last time the market for overnight index swaps linked to Fed meeting dates fully priced that much tightening was on Feb. 11, the day after U.S. consumer-price inflation numbers for January came in hotter than expected, prompting investors to wager on more hawkish central bank policy. The rate on swaps linked to the December meeting climbed as high as 1.82% Monday, 174 basis points above the current effective fed funds rate ... (full story)