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Federal Reserve is poised to follow a half-of-a-percentage point interest rate hike in May with two even bigger rate hikes at subsequent meetings, traders were betting on Friday, one day after Fed Chair Jerome Powell signaled he would be open to “front-end loading” the U.S. central bank’s retreat from super-easy monetary policy.

Futures contracts tied to the Fed’s policy rate now reflect overwhelming expectations for a rise in short-term borrowing costs to the 0.75%-1% range at the Fed’s May 3-4 meeting, and to a 2%-2.25% range by the close of its July 26-27 meeting.

Economists at Nomura Research are also now calling for the Fed to deliver increases of 0.75 percentage points at each of the Fed’s June and July meetings.

“Stronger (market) pricing for such a move would likely ease the path for the FOMC and participants could likely forge a consensus on such action quickly,” they wrote in a note published early Friday.

The Fed lifted its policy rate by a quarter-percentage point last month in its first increase after what had been two years of a near-zero policy rate, though “many, many” Fed policymakers felt bigger rates hikes would be appropriate, Powell noted Thursday.

“50 basis points will be on the table for the May meeting,” Powell said. “I also think there’s something in the idea of front-end loading” the removal of accommodation, he added.

The Fed raised its target range for the fed funds rate to 0.25%-0.5% in March, from the 0%-0.25% range it had been for the prior two years.

Adding to the sense of urgency, even dovish Fed policymakers like San Francisco Fed President Mary Daly and Chicago Fed chief Charles Evans this week embraced the idea of a half-point hike in May and of getting interest rates to a “neutral” level by the end of the year.

Most at the U.S. central bank say that level is likely between 2.25%-2.5% in the long run.

But with inflation as high as it is -- consumer prices rose 8.5% last month, well above the Fed’s goal of 2% -- some observers say interest rates will need to rise even further for the “real” cost of borrowing to be high enough to start biting into economic activity.

Daly told reporters earlier this week that she believes 2.25%-2.5% is still a “reasonable” estimate for neutral, but noted that policymakers won’t really know until rates get closer to that level and they can observe what happens in the economy.

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