Traders keep bets on December for first Fed rate hike

(Reuters) - U.S. short-term interest-rate futures contracts dropped, then rose, on Wednesday as traders tried to assess the likely timing of a first rate hike after Federal Reserve officials indicated they see the economy strong enough to handle a rate hike by the end of the year.

Futures contracts show that traders still see December as the first Fed meeting when a rate hike is more likely than not, based on CME FedWatch, which tracks expectations using its Fed funds futures contracts.

Traders see a 66 percent chance of a December rate hike, and a 49 percent chance of an October rate hike.

The Fed has kept short-term rates near zero since December 2008.

(Reporting by Ann Saphir; Editing by James Dalgleish)