July 2, 2019 / 1:48 PM / 3 months ago

U.S. fed funds rate recedes from one-month peak

NEW YORK (Reuters) - The interest rate U.S. banks charge to lend reserves slipped from a one-month peak as demand for reserves retreated from the typical quarter-end surge, data from the New York Federal Reserve released on Tuesday showed.

The effective, or average, interest rate on what banks charge each other to borrow reserves overnight USONFFE= dipped to 2.39% on Monday from 2.40% on Friday.

This interbank borrowing cost is what the Federal Reserve monitors to ensure it is meeting its interest rate goal.

Interest rates futures implied traders fully expect the U.S. central bank would reduce its target range for the federal funds rate by at least a quarter point at its policy meeting at the end of the month, according to CME Group’s FedWatch program.

Evidence of weakening global growth and trade tensions between the United States and its trading partners have stoked bets the Fed may lower interest rates multiple times in the coming months.

Reporting by Richard Leong; Editing by Chizu Nomiyama

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