Fed funds futures traders boost odds of a Fed pause next week to as much as 32% following First Republic Bank turmoil

Fed funds futures traders see a growing likelihood that Federal Reserve policy makers will not raise rates at their May 2-3 meeting, as California’s First Republic Bank continues to get pummeled by investors. As of Wednesday morning, traders briefly saw a 31.6% chance that Fed officials will leave interest rates between 4.75% and 5%, according to the CME FedWatch Tool. That’s up from 24% a day ago. Meanwhile, they still see a better-than-not chance of a quarter-point rate hike next Wednesday, and continue to price in an almost certain chance of rate cuts by December. Shares of First Republic Bank fell 23% in morning trading,…