Traders bet on extended Fed policy pause after strong jobs report

Dec 6 (Reuters) - U.S. short-term interest rate futures dropped on Friday after a government report showed November job gains were stronger than expected, giving traders more confidence the Federal Reserve will see no need to cut borrowing costs for some time.

The Fed, already expected to keep rates in the range of 1.5% to 1.75% at its meeting next week, had signaled that only a significant turn for the worse in the economic outlook could trigger more policy easing.

After the report, which showed U.S. employers added 266,000 jobs last month, bets rose that the Fed will remain on hold until the second half of next year, based on futures contracts traded at CME Group. (Reporting by Ann Saphir; editing by John Stonestreet Editing by)

Advertisement