Traders trim bets on Fed rate hike later this year

U.S. short-term interest rate futures trimmed earlier losses and some nearer-term maturities rose on Wednesday after the Federal Reserve kept rates steady and signaled future rate hikes would be even more gradual than previously thought.

The change in prices suggests traders are trimming bets on a rate hike later this year. Before the report traders saw about a 58 percent chance of a December rate hike, and were betting on another hike in 2017.

The price of futures contracts tied to the Fed's benchmark policy rate moves inversely to the rate that traders expect at any given point in time.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)