Traders of U.S. short-term interest rate futures continued to bet on a
Federal Reserve rate hike in December after a U.S. government report
published on Friday showed solid jobs gains and a rise in wages in
Traders now see about a 72 percent chance of a December
rate hike, a tad higher than before the report, and pushed up slightly
the chances that they see of the Fed raising rates again in 2017.
policymakers met earlier this week but held off raising rates as they
wait to see more confirmation from economic data that the economy is
strong enough to withstand a slightly tighter stance of monetary policy.
The proximity of the U.S. presidential election, now just four
days away, likely also played a role in their decision, though few Fed
officials have acknowledged politics as they seek to explain their
caution in the face of a strong jobs growth and signs that inflation is
beginning to rise.
"The conditions are appropriate for them to raise rates," said Russell Price, senior economist at Ameriprise Financial Services Inc.
Fed president Dennis Lockhart on Friday said the jobs report was
"satisfactory" and told investors that they should expect gradual
increases in interest rates over the next two years.