U.S. Funding Rates Keep on Rising, Fueling Talk of a Fed Tweak

Effective fed funds rate ticks higher; repo rates also surging
Move has to ‘meaningfully’ boost odds of IOER change: NatWest

The Marriner S. Eccles Federal Reserve building stands in Washington, D.C., U.S.Photographer: Andrew Harrer/Bloomberg

Provide news feedback or report an error

Confidential tip?

Send a tip to our reporters

Site feedback:

Take our Survey

By Alex Harris

April 30, 2019 at 12:41 PM UTC

Updated on

April 30, 2019 at 3:56 PM UTC

This article is for subscribers only.

The benchmark targeted by the Federal Reserve is on the rise again and that’s leading some to question whether the central bank could make adjustments as soon as this week to maintain control of the rate.

The effective fed funds rate rose to 2.45 percent on Monday, according to central bank data released Tuesday. That’s well above the central bank’s interest on excess reserves rate -- a level that’s historically acted as a cap for the benchmark and currently stands at 2.40 percent -- fueling questions about a possible tweak to IOER by officials. While fed funds is still within the central bank’s overall target range of 2.25 percent to 2.50 percent, it is creeping higher within that band.