Traders raised the likelihood of a half-percentage-point February rate hike by the Federal Reserve on Thursday after Kansas City Fed President Esther George told CNBC she sees rates above 5% for some time. The chances of a 50-basis-point February hike were seen at 43%, up from 30% a day ago. Meanwhile, fed funds futures traders still see a better-than-50% chance of only a 25-basis-point hike next month, according to the CME FedWatch Tool. Futures also foresee a 39% chance that the fed-funds-rate target will get to between 5% and 5.25% by March, up from 25% on Wednesday, after factoring in a 25-basis-point hike that month. The Fed’s main policy-rate target currently sits in a range between 4.25% and 4.5%.

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