Fed-funds futures traders are pricing in a scenario in which Federal Reserve policy makers look past banking-sector developments to some extent, and keep hiking interest rates through May. A 73% chance of a quarter-of-a-percentage-point rate hike for Wednesday was seen, up from 62% on Friday — which would take the fed funds rate target to a range of 4.75% to 5%. Meanwhile, traders boosted the chances of another quarter-point hike in May, to 36% versus 20.7% previously. Treasury yields also bounced back across the board on Monday, led by advances in the 1- and 3-month rates.
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