Some large US banks are revamping short-term trading desks that have languished in recent years, anticipating that a Federal Reserve rate increase this week will unleash a flood of activity.

Traders focusing on ultrashort interest-rate bets expect increased activity from hedge funds and asset managers seeking to profit from market turmoil and hedge their risks after seven years of the Fed leaving its benchmark rate near zero. The Fed will announce a decision at the conclusion of its two-day policy meeting on December 16.