Fed seen on track for rate hike with latest retail sales data

(Reuters) – Traders of futures tied to the Federal Reserve’s policy rate on Friday kept bets the U.S. central bank will increase its benchmark rate in May by another quarter-of-a-percentage point, even after a report showed overall retail sales dropped more than expected last month.

U.S. short-term interest rate futures reflect the view that a rate hike in May is about four times as likely as no move, slightly firmer than the chance seen before the Commerce Department report. The current target range is 4.75%-5.00%.

(This story has been corrected to say retail sales drop was more than expected, in paragraph 1)

(Reporting by Ann Saphir; Editing by Toby Chopra)