Traders boost bets on March Fed rate hike after jobs report

[January 08, 2016]  (Reuters) - U.S. short-term interest-rate futures contracts sank on Friday after a new government report showed the economy added many more jobs than expected last month, prompting traders to price in more aggressive Federal Reserve rate hikes this year.

Fed funds futures contracts show that traders now see a better-than-even chance of a rate hike in March. Before the report they were pricing in a 45 percent chance.

Traders also began pricing in a bigger chance that the Fed will raise rates three times this year, versus their earlier view that only two rate hikes are likely.

(Reporting by Ann Saphir; Editing by Bernadette Baum)

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