March 14 (Reuters) - The Federal Reserve is seen raising its benchmark rate a quarter of a percentage point next week and delivering another hike of the same size in May, as a government report showed U.S. consumer prices rose solidly in February.
Prices of fed funds futures reflected about a 90% chance of a quarter-percentage point rate hike this month with about a 10% chance seen of no change. The current target range is 4.5%-4.75%.
Until late last week financial markets had been pricing in a half-point rate hike at the Fed's March 21-22 meeting to stem high inflation.
Expectations shifted abruptly after a bank run triggered the failure of Silicon Valley Bank Friday and a dramatic move over the weekend by the Fed and other U.S. regulators to shore up confidence in the banking system.
Rate futures contracts pricing now points to the Fed reversing course with rate cuts starting as early as June, with rates seen ending this year below where they are now.
