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Fed Funds Opened at 0.08%, Within Fed’s Target Range, ICAP Says

Dec. 5 (Bloomberg) -- Fed funds, the U.S. overnight inter-bank lending rate, opened at 0.08 percent, within the Federal Reserve’s target range of zero to 0.25 percent.

Fed funds closed at 0.6 percent on Dec. 2 after trading from 0.06 percent to 0.12 percent and averaging 0.08 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e-mailed statement.

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 acquire Treasuries due from August 2022 to February 2031. The Fed plans to purchase $1.5 billion to $2 billion of the securities today, 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 December 2017 to November 2019. 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: Dave Liedtka at dliedtka@bloomberg.net

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