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Fed Traders Boost May Hike Bets After Better-Than-Expected Jobs
Bond market expectations for a Federal Reserve interest-rate hike in May increased after the release of a stronger-than-anticipated US jobs report. Short-end Treasury yields leaped higher as the amount of extra policy tightening priced by the swaps market in for the next Federal Open Market Committee gathering was boosted to around 18 basis points from the current effective fed funds rate of 4.83%. That suggests a more than two-in-three chance that officials will bolster the benchmark by a quarter point. The 2-year Treasury yield surged as much as 12 basis points to 3.96% before drifting to 3.92%. The 10-year ... (full story)