Fed Funds Projected to Open at 0.06% to 0.09%, ICAP Says

Fed funds, the U.S. overnight inter- bank lending rate, is projected to open at 0.06 percent to 0.09 percent, within the Federal Reserve’s target of zero to 0.25 percent.

Fed funds closed at 0.3125 percent yesterday after trading from 0.06 percent to 0.3125 percent and averaging 0.1 percent, according to ICAP Plc, the world’s largest inter-dealer broker. ICAP’s monthly average is 0.08 percent.

The central bank will acquire as much as $2.75 billion of Treasuries maturing from February 2036 to November 2041. The purchases 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.

The Fed will release its monthly schedule for its Treasury purchases and sales as part the maturity extension program. The announcement is schedule for 2 p.m. New York time.

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: David Liedtka at dliedtka@bloomberg.net

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