Fed funds, the U.S. overnight inter-bank lending rate, is projected to open at 0.07 percent to 0.10 percent, within the Federal Reserve’s target of zero to 0.25 percent.
Fed funds closed at 0.05 percent yesterday after trading from 0.04 percent to 0.15 percent and averaging 0.08 percent, according to ICAP Plc, the world’s largest inter-dealer broker. ICAP’s monthly average is 0.075 percent.
The central bank will acquire $2.25 billion to $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 also purchase $4.25 billion to $5 billion of notes maturing from February 2020 through November 2021 in a second open-market operation this afternoon.