Technical adjustment from Fed helps to boost overnight rate
Fed data shows the US overnight funding rate at 1.58% compared to 1.54% a day earlier. The Fed funds rate rose to 1.60% from 1.55%.
On Wednesday, the Fed voted unanimously to set the interest rate paid on required and excess reserve balances at 1.60% from 1.55% and said:
"Setting the interest rate paid on required and excess reserve balances 10 basis points above the bottom of the target range for the federal funds rate is intended to foster trading in the federal funds market at rates well within the FOMC's target range."
The technical change was expected because Fed funds were getting uncomfortably close to the bottom of the range.
