The Federal Reserve on Wednesday vowed to pump an additional $1 trillion
into the U.S. economy in an aggressive bid to battle a deep recession, partly
by buying government bonds for the first time since the 1960s.
The central bank said it would buy up to $300 billion in longer-term Treasuries to bring down borrowing costs and said it would expand an existing program to buy debt and securities issued by mortgage finance agencies by $850 billion to $1.45 trillion, an effort to lower mortgage rates.
The Fed's move stunned markets, but will it work to ease the credit crisis, support the U.S. housing market and restore ecomomic growth -
Yields on benchmark U.S. government bonds saw their biggest one day fall since the 1987 stockmarket crash, but then steadied on Thursday. U.S. mortgates tumbled on Thursday and now near record lows.
The U.S. dollar slumped as hopes for a return to economic growth reduced the need for the safe-haven.
To read more, double-click on the square brackets below: > US mortgage rates drop near record lows after Fed move > Fed move helps homeowners but problems remain > US dollar weakens, commodities surge on Fed move > Fed plan may lower rates but at what cost - > Too early to write off US dollar despite Fed's moves > Bernanke acts while rest of Washington fumes > More debt a curious solution to a credit crisis > Fed's balance sheet again balloons above $2 trln in week > Fed expands TALF lending program collateral > Fed to buy more than $1 trln Treasuries and mortgages
FACTBOXES: > Federal Reserve statement after March 17-18 meeting > Bank of Japan on subordinated loans to banks > Central banks turn to new measures to help economies > Federal Reserve statement on launching TALF
Keywords: CREDITCRISIS/TAKEALOOK (New York Treasury Desk +1-646-223-6300) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The central bank said it would buy up to $300 billion in longer-term Treasuries to bring down borrowing costs and said it would expand an existing program to buy debt and securities issued by mortgage finance agencies by $850 billion to $1.45 trillion, an effort to lower mortgage rates.
The Fed's move stunned markets, but will it work to ease the credit crisis, support the U.S. housing market and restore ecomomic growth -
Yields on benchmark U.S. government bonds saw their biggest one day fall since the 1987 stockmarket crash, but then steadied on Thursday. U.S. mortgates tumbled on Thursday and now near record lows.
The U.S. dollar slumped as hopes for a return to economic growth reduced the need for the safe-haven.
To read more, double-click on the square brackets below: > US mortgage rates drop near record lows after Fed move > Fed move helps homeowners but problems remain > US dollar weakens, commodities surge on Fed move > Fed plan may lower rates but at what cost - > Too early to write off US dollar despite Fed's moves > Bernanke acts while rest of Washington fumes > More debt a curious solution to a credit crisis > Fed's balance sheet again balloons above $2 trln in week > Fed expands TALF lending program collateral > Fed to buy more than $1 trln Treasuries and mortgages
FACTBOXES: > Federal Reserve statement after March 17-18 meeting > Bank of Japan on subordinated loans to banks > Central banks turn to new measures to help economies > Federal Reserve statement on launching TALF
Keywords: CREDITCRISIS/TAKEALOOK (New York Treasury Desk +1-646-223-6300) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.