Traders increased bets on a June 2017 interest rate hike after the Federal Reserve on Wednesday raised rates and surprisingly forecast three increases for the coming year.
The CME Group FedWatch probability for a June 2017 rate hike rose from a 57.7 percent chance for a June rate hike to 78 percent after the central bank announcement.
June "probably makes sense" for the next rate rise, said Ryan Larson, head of equity trading, U.S., at RBC Global Asset Management. "It will probably take a couple months for the new administration to do the things they've been talking about regarding fiscal stimulus."
Thirty-day fed funds futures prices are widely considered a reliable indicator of U.S. monetary policy changes. CME's FedWatch tool tracks the target rates based on fed funds futures contract prices.
A reading above 50 percent indicates the market's guess for the next rate hike.
Before the announcement, the market estimated that the federal funds rate would be higher than its current level across all months tracked by CME.
After the announcement, odds increased the most for the second half of 2017, in months tracked by CME:
— CNBC's Evelyn Cheng and Elizabeth Gurdus contributed to this report.