Fed Funds Projected to Open at 0.12% to 0.17%, ICAP Says

Fed funds, the U.S. overnight inter-bank lending rate, is projected to open between 0.12 percent and 0.17 percent, within the Federal Reserve’s target range of zero to 0.25 percent.

Fed funds closed at 0.1 percent yesterday after trading from 0.1 percent to 0.18 percent and averaging 0.14 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e- mailed statement. ICAP’s monthly average is 0.135 percent.

The Fed will hold two separate purchases of U.S. debt today as part of its plan to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries to reduce borrowing costs further and counter rising risks of a recession.

Beginning at 10:15 a.m. New York time, the central bank will buy Treasuries due from February 2036 to February 2042. The Fed plans to purchase $1.5 billion to $2 billion of securities, according to the New York Fed’s website. This operation will close at 11 a.m.

Starting at 1:15 p.m. and ending at 2 p.m., the Fed will purchase Treasuries maturing from April 2018 to February 2020. The central bank will purchase from $4.25 billion to $5 billion of Treasuries in this maturity range.

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: Paul Cox at pcox16@bloomberg.net

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