BofA expects the Fed to hike the minimum bid....>

FED: BofA expects the Fed to hike the minimum bid rate in repo ops by 5bps to

15bps this week, based on the comment in the April FOMC minutes that "it might

be appropriate to position ... repurchase operations in a backstop role" and

"the minimum bid rate in repo operations could be increased."

- BofA: "Repo op take-up is relatively low but has seen a modest rise in recent

weeks, and raising the rate may cause slight frictions in funding markets."

- Wrightson ICAP says in principle it's an "excellent idea" but doubts the Fed

sees any need to do so now: "The cumulative effect of the Treasury's bill

issuance in April and May has begun to push overnight rates higher this month,

and the prospect of large seasonal outflows from money funds during the delayed

tax season in July could create additional pressures next month...The April

minutes put the market on notice that the terms of the Desk's repo funding would

probably become less generous over time, but we doubt that the Fed intends to

make any significant changes this week."

- Unclear whether such a move would be announced in the FOMC statement/

accompanying implementation note.