Fed-funds futures traders on Wednesday pulled back on bets for a June rate hike after a pair of Federal Reserve officials said it might be appropriate to skip an increase at the central bank’s next policy meeting. Fed-funds futures reflect a 39% probability of a quarter-point hike in the fed-funds rate to a range of 5.25% to 5.5% in June, down from 66.6% on Tuesday, according to the CME FedWatch tool. “I am in the camp increasingly coming into this meeting thinking that we really should skip, not pause, but skip an increase,” said Philadelphia Fed President Patrick Harker in public remarks Wednesday. Separately, Fed Gov. Philip Jefferson said skipping a rate rise in June “would allow the committee to see more data before making decisions about the extent of additional policy firming.” Like Harker, Jefferson cautioned against reading too much into a June decision to leave rates unchanged. “A decision to hold our policy rate constant at a coming meeting should not be interpreted to mean that we have reached the peak rate for this cycle,” he said.
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