[NEW YORK] The key borrowing costs the US Federal Reserve targets to achieve its interest rate objective rose to its highest level in over two years as traders await for clues whether the central bank would raise rates later this year.
The federal funds rate, which banks charge each other to borrow excess reserves, averaged 0.14 per cent on Tuesday, the highest level since May 2013, Fed data released Wednesday showed.
The average fed funds rate averaged 0.13 per cent on Monday for nine straight days.
The fed funds rate traded in a range of 0.07 per cent to 0.32 per cent, compared with Monday's 0.07 to 0.3125 per cent.
Interbank borrowing costs for longer periods has been rising steadily as traders anticipate the Fed might raise short-term rates later this year as the jobs market has improved.
The Federal Open Market Committee, the central bank's policy setting group, will release a statement at 2 pm (1800 GMT) following a two-day meeting.
Half hour later, Fed Chair Janet Yellen is scheduled to conduct a press conference.
Wall Street firms widely anticipate the Fed will end its near zero interest rate policy in September, while the futures market signaled traders expect such a move in December at the earliest.