U.S. Federal Reserve’s policy rate seen higher for longer as inflation sticks

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U.S. Federal Reserve’s policy rate seen higher for longer as inflation sticks
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The Fed is now seen far more likely than not to raise its policy target range, with a better than one in three chance seen that it will lift the rate at least one more quarter-point notch by July

Traders expect the Federal Reserve to lift its policy rate at least three more times and keeping it high for longer after a government report Friday showed inflation faded less than thought late last year and indeed accelerated in January.

Based on those futures prices, the Fed is now seen far more likely than not to raise its policy target range, currently at 4.5 per cent-4.75 per cent, to a 5.25 per cent-5.5 per cent range by June, with a better than one in three chance seen that it will lift the rate at least one more quarter-point notch by July.

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