Sam Boughedda

The Federal Reserve has raised its rate of interest, and traders are now pricing in three rate rises at half the rate.

An 8.6% increase in the May sales compared to a year earlier was the highest growth since December 1981. It also surpassed all expectations.

The Treasury yield fell below the 5-year mark for the first month in a row.

According to the markets, there will be an increase of 50 basis points in the June, July and Sept market, as well as 75 basis points more tightening by Federal Reserve since 2022.

Bloomberg reported that swap contracts which refer to Fed policy meeting dates were repricated to reflect expectations that the US central banks will raise interest rates in September.

Michael Darda, the chief economist at MKM Partners, told Bloomberg that “the Fed is still behind the curve.”