Fed Funds Open at 0.16%, Within Fed’s Target Range, ICAP Says

Federal funds, the U.S. overnight inter-bank lending rate, opened at 0.16 percent, within the Federal Reserve’s target of zero to 0.25 percent.

Fed funds closed at 0.28 percent yesterday after trading from 0.12 percent to 0.28 percent and averaging 0.16 percent, according to ICAP Plc, the world’s largest inter-dealer broker. ICAP’s monthly average is 0.156 percent.

The central bank will acquire Treasuries maturing from August 2020 to May 2022. 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 central bank plans to purchase from $4.5 billion to $5.25 billion of securities today, according to the New York Fed’s website.

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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