U.S. money markets bet on a full rate hike by end-2022 By Reuters

© Reuters. FILE PHOTO: A picture illustration shows U.S. 100-dollar bank notes taken in Tokyo August 2, 2011. REUTERS/Yuriko Nakao/File Photo

LONDON (Reuters) – U.S. money markets on Wednesday moved fully to price in a quarter point U.S. interest rate increase by end-2022 after stronger-than-expected inflation.

Eurodollar futures contracts expiring in December 2022 now price in 25 bps in rate increases by the end of next year compared to 22 bps before the data.

U.S. consumer prices increased more than expected as booming demand amid a reopening economy pushed against supply constraints.

Futures contracts in 2023 also pointed to higher rates with June 2023 contracts pricing 45 bps in cumulative rate hikes until then compared to 41 bps before the data.

As U.S. Treasury yields rose, European bond yields headed higher and stocks came under pressure.

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