Fed funds, the U.S. overnight inter-bank lending rate, is projected to open between 0.16 percent and 0.18 percent, within the Federal Reserve’s target range of zero to 0.25 percent.
Fed funds closed at 0.15 percent yesterday after trading from 0.14 percent to 0.18 percent and averaging 0.17 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e-mailed statement.
The Fed will hold two separate operations as part of its plan to replace 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 2021 to November 2022. The Fed plans to purchase $4.25 billion to $5.25 billion of 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 sell Treasuries maturing from April 2015 to May 2015. The central bank will sell from $7 billion to $8 billion of Treasuries in this maturity range.