NEW YORK, (Reuters) – Federal funds rate futures increased Monday the likelihood of a half-point tightening at the Federal Reserve’s next policy meeting in May after hawkish remarks from Fed Chair Jerome Powell.

Powell stated Monday that the Fed should move quickly to reduce too high inflation. If necessary, it will use larger-than-usual rate increases to achieve this goal.

Late afternoon trading showed that rate futures had a 63% chance of the Fed raising interest rates by 50bps in May. That’s less than a week following a Fed increase by one-quarter to 0.25% to0.50%.

Action Economics has published its most recent blog: “Fed Chair Powell seemed more hawkish that we and the market anticipated, emphasizing how important it was to address inflation instead of taking a cautious approach to all the uncertainties surrounding growth.”

Is he setting up the market for a 50-basis point hike in May?” Also, it is likely that a balance sheet decrease will be announced in May. However, some insight before that can be seen in minutes due on April 6.

Futures price in tightening policy by 184 basis point for this year.

Futures were pricing in an approximately 52% chance of 50 basis point increases at the May meeting, just before Powell’s remarks to the National Association of Business Economics conference text was published.

The CME FedWatch Tool showed an additional 48.4% likelihood of a 50basis-point rise in May.

In the 2nd paragraph, this story includes Powell’s name as a dropped name.