Fed Funds Open at 0.12%, Within Target Range, According to ICAP

Fed funds, the U.S. overnight inter-bank lending rate, opened at 0.12 percent, within the Federal Reserve’s target of zero to 0.25 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e-mailed statement.

Fed funds traded from 0.05 percent to 0.3125 percent on Dec. 5, according to data posted on the Federal Reserve Bank of New York’s website. The fed effective, or a volume-weighted average of rates on trades arranged by major brokers, was 0.12 percent.

The Fed will conduct a test of an overnight fixed-rate reverse-repo facility. The temporary open-market operations will use Treasuries as collateral. The fixed-rate on the reverse repos, for transactions that total at or below the $300 billion aggregate limit, will be at a 0.10 percentage point on daily operations through Dec. 12, the New York Fed said in a statement posted on their website on Oct 29.

The central bank will also conduct the first of a series of four term reverse repurchase agreement test operations. The Fed will offer $50 billion of the agreement between 9:30 to 10:00 a.m. New York time at a maximum bid rate of 0.10 percent, the New York Fed said in a statement on Dec. 1.

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