federal funds market

Meanwhile, the rate for overnight bank loans in the Federal funds market was 8 7/16 percent.

Many expect the overnight rate for bank loans in the Federal funds market to fluctuate around 6 3/4 percent in the near future.

Federal agencies also lend idle funds in the federal funds market.

Reserves may come from any source, including the federal funds market, deposits by the public, and borrowing from the Fed itself.

The session's one mild surprise took place in the Federal funds market, where the overnight rate for bank loans softened considerably throughout the afternoon.

In addition, the Fed did nothing to push up the overnight rate for bank loans in the Federal funds market yesterday.

The two-year note yield is about a fourth of a percentage point higher than the recent average for overnight bank loans in the Federal funds market.

The funds rate measures the cost of overnight bank loans in the Federal funds market and is a benchmark for other short-term interest rates.

The decline in bill rates coincided with a slide in the overnight rate for bank loans in the Federal funds market.

Market participants were concerned by yesterday's increase in the overnight rate for bank loans in the Federal funds market to as high as 7 percent.

The Fed last lowered its target for the overnight rate on bank loans in the Federal funds market in late April, to 5.75 percent.

Analysts said that lowering the overnight rate on bank loans in the Federal funds market was one way the Fed could help encourage bank lending.

Year-end pressures continued to buffet the overnight rate for bank loans in the Federal funds market yesterday, although not so badly as earlier in the week.

Rates on short-term issues were little changed, as the overnight rate for bank loans in the Federal funds market hovered at 6 1/16 percent most of the day.

Fed officials said they hoped the change would reduce volatility in the federal funds market, which is the primary means for the Fed to influence the economy.

People often say that the Fed controls interest rates, but what it actually controls is only an interest rate, the rate in the overnight federal funds market.

Short-term interest rates also declined, with the overnight rate for bank loans in the Federal funds market dropping to about 6 1/8 percent, from 6.56 percent Tuesday.

To meet reserve requirements and manage day-to-day liquidity needs, banks buy and sell short-term uncollateralized loans in the federal funds market.

But a drop in oil prices and a softening in the overnight rate for bank loans in the Federal funds market later forced traders to buy securities.

The closely watched overnight rate for bank loans in the Federal funds market has fluctuated around 6.625 percent recently, up from about 6.125 percent in early April.

The overnight rate for bank loans in the Federal funds market, which has gyrated wildly for the last few days, traded in a somewhat narrower range yesterday.

The FOMC decides on open market operations, including the desired levels of central bank money or the desired federal funds market rate.

For example, when the Federal Reserve conducts open market operations in the federal funds market, the instrument it is manipulating is its holdings of government securities.

Because of their shorter maturity, notes and bills are more sensitive to shifts in the overnight rate for bank loans in the Federal funds market than longer-term securities.

Elsewhere in the short-term market the overnight rate for bank loans in the Federal funds market rose above 7 percent for the first time since Oct. 27.