Fed funds futures trader now sees an 82.3% probability of a Federal Reserve rate hike in May by 25 basis points after Governor Christopher Waller stated that policymakers need to continue raising borrowing costs. This would bring the fed funds target rate to between 5%-5.25%. According to the CME FedWatch Tool, the odds of a second quarter-point increase in June have also increased to nearly 18%. Traders are also pulling back on their expectations of rate cuts later this year. Treasury yields increased, with the 2-year rate rising 9 basis points to 4.08 percent.