Markets expect a US interest rate hike early next year.

May 15 (Reuters) - Interest rate futures fell sharply on Friday, reflecting a growing conviction among bond market traders that high inflation will prompt the Federal Reserve to raise interest rates later this year or in early 2027.

According to the CME Group’s FedWatch tool, the probability of the Federal Reserve raising its benchmark interest rate by 25 basis points by the January Open Market Committee meeting has risen to around 60 percent, while a rate hike in December is considered a matter of equal probability.


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