Jan 31 (Reuters) - Traders on Wednesday dumped bets the Federal Reserve will begin a series of interest-rate cuts as soon as March after Fed Chair Jerome Powell said that timing was not likely, and now are betting on a May start to rate cuts. "I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting" to reduce rates then, Powell said in a press conference following the U.S. central bank's decision to hold the policy rate in the current 5.25%-5.5% range, where it has been since July.
Futures contracts tied to the Fed policy rate are pricing in only about a 35% chance of rate cuts starting in March. Before the Fed decision at 2 p.m. (1900 GMT) the probability of a March rate cut was seen at more than 60%.
The Fed's statement said its policy-setting committee "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."
Traders continue to see the Fed policy rate ending the year in the 3.75%-4% range, which would be the case if the Fed cuts rates steadily in quarter-of-a-percentage-point increments at each meeting starting in May.
Reporting by Ann Saphir with reporting by Noel Randewich Editing by Chris Reese, Nick Zieminski and Sandra Male
