Fed funds closed at 0.01 percent yesterday after trading from 0.01 percent to 0.15 percent and averaging 0.07 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e- mailed statement. ICAP’s monthly average is 0.078 percent.
No open market operations, which add or drain reserves to the banking system, are expected, according to Wrightson ICAP, a research unit of ICAP specializing in U.S. government finance.
In repos, the Fed buys U.S. Treasury, mortgage-backed and agency debt from its primary dealers for a set period, temporarily raising the amount of money available in the banking system. At maturity, the securities are returned to the dealers, and the cash to the Fed. In reverse repos, temporary funds are drained from the system.
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