Fed Funds Projected to Open at 0.09% to 0.11%, According to ICAP

Fed funds, the U.S. overnight inter-bank lending rate, is projected to open at 0.09 percent to 0.11 percent, within the Federal Reserve’s target of zero to 0.25 percent.

Fed funds closed at 0.09 percent on Oct. 4 after trading from 0.04 percent to 0.25 percent and averaging 0.07 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e-mailed statement.

The central bank will acquire Treasuries $2.75 billion to $3.5 billion of Treasuries maturing from November 2020 to August 2023. The purchases, which are permanent open market operations, are the part of the Fed’s quantitative easing program aimed at keeping long-term rates low.

The Federal Reserve Bank of New York announced on Sept. 20 that it will test an overnight fixed-rate reverse repo facility as an additional tool to aid policy makers when they eventually seek to raise interest rates and tighten monetary policy. These temporary open market operations, which will be open to all eligible reverse repo counterparties and will use Treasury collateral, will take place between 11:15 a.m. and 11:45 a.m. New York time. The Fed said the transactions, which began on Sept. 23, could extend through Jan. 29.

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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