Aug 29 (Reuters) - The amount of U.S. commercial paper outstanding declined to a seven-week low in the latest week as short-term corporate borrowing abated ahead of month-end, Federal Reserve data released on Thursday showed.
The decrease in this type of corporate debt - the proceeds of which are used to fund payrolls and inventories - stemmed partly from expectations the Federal Reserve would lower key lending rates by at least a quarter-point at its Sept. 16-17 policy meeting.
Last month, the U.S. central bank lowered short-term rates for the first time since 2008 to counter a softening global economy and sluggish domestic inflation.
A fresh round of tit-for-tat tariffs between China and United States since the rate cut has stoked bets on further policy easing from the Fed.
Commercial paper (CP) outstanding fell $8.6 billion to $1.107 trillion on Wednesday, the lowest level since the week of July 10.
CP outstanding, after adjustments for seasonal factors, decreased by $9.7 billion to $1.120 trillion, the lowest since the week of June 19.
Interest rates on commercial paper were generally lower than a week earlier.
The borrowing costs on seven-day CP from top-rated financial firms this week were averaging 2.07%, down from 2.13% a week before, while the one-week rates on non-financial CP were averaging 2.06%, down from 2.08% the prior week, Fed data showed. (Reporting by Richard Leong, Editing by Rosalba O’Brien)