Short-term U.S. rate futures little changed as Fed tapers

(Reuters) - U.S. short-term interest-rate futures contracts were little changed after the Federal Reserve reduced its monthly bond-buying program by $10 billion as expected, as traders kept bets the Fed won't raise rates until mid-2015.

The contracts, which remained slightly up on the day, show markets are assigning a roughly 51 percent chance of a first Fed rate hike in June 2015, based on CME FedWatch, which tracks rate hike expectations using Fed funds futures contracts traded at CME Group Inc's Chicago Board of Trade.

The likelihood of a rate hike is seen rising at subsequent meetings, the contracts showed.

The Fed has targeted short-term rates of between zero and 0.25 percent since December 2008, and has promised to keep them there until well past the time the U.S. unemployment rate falls to 6.5 percent.

On Wednesday it announced a reduction of its monthly bond-buying program to $65 billion in a nod to a pickup in U.S. economic strength.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)