June 17, 2015 / 6:18 PM / 2 years ago

Traders keep bets on December for first Fed rate hike

Traders work on the floor of the New York Stock Exchange, June 16, 2015. REUTERS/Lucas Jackson

(Reuters) - U.S. short-term interest-rate futures contracts dropped, then rose, on Wednesday as traders tried to assess the likely timing of a first rate hike after Federal Reserve officials indicated they see the economy strong enough to handle a rate hike by the end of the year.

Futures contracts show that traders still see December as the first Fed meeting when a rate hike is more likely than not, based on CME FedWatch, which tracks expectations using its Fed funds futures contracts.

Traders see a 66 percent chance of a December rate hike, and a 49 percent chance of an October rate hike.

The Fed has kept short-term rates near zero since December 2008.

Reporting by Ann Saphir; Editing by James Dalgleish

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