Bloomberg News

Fed Funds Projected to Open at 0.14% to 0.18%, ICAP Says

August 03, 2012

Fed funds, the U.S. overnight inter- bank lending rate, is projected to open at 0.14 percent to 0.18 percent, within the Federal Reserve’s target of zero to 0.25 percent.

Fed funds closed at 0.15 percent yesterday after trading from 0.1 percent to 0.27 percent and averaging 0.13 percent, according to ICAP Plc, the world’s largest inter-dealer broker.

The central bank will sell Treasuries maturing from January 2013 to June 2013. The sales are part of the Fed’s program to replace $267 billion of short-term debt in its portfolio with longer-term Treasuries in an effort to keep borrowing costs low.

The central bank plans to sell from $7 billion to $8 billion of securities today, according to the New York Fed’s website.

The Federal Reserve Bank of New York will begin today a series of ”small-value” repurchase agreements with its primary dealers as part of its “operational readiness program,” according to a statement posted on its website yesterday. The operations don’t represent any change in Fed monetary policy and are part of the central bank’s efforts to test its readiness to conduct temporary open market operations in the future. The New York Fed hasn’t conducted repos since Dec 30, 2008.

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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