Bloomberg News

Fed Funds Projected to Open at 0.13% to 0.17%, ICAP Says

May 29, 2012

Fed funds, the U.S. overnight inter- bank lending rate, is projected to open at 0.13 percent to 0.17 percent, within the Federal Reserve’s target of zero to 0.25 percent.

Fed funds closed at 0.07 percent on May 25 after trading from 0.07 percent to 0.17 percent and averaging 0.15 percent, according to ICAP Plc, the world’s largest inter-dealer broker. ICAP’s monthly average is 0.156 percent.

The central bank will sell $8 billion to $8.75 billion of Treasuries maturing from June 2014 to May 2015. The sales are part of the Fed’s program to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries in an effort to reduce borrowing costs further and counter rising risks of a recession.

To contact the reporter on this story: Liz Capo McCormick in New York at emccormick7@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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