Fed Spends Another $1.2 Trillion On Bailout

Another trillion plus to lower mortgage rates? Is this really supposed to help anything?

From the Washington Post:

The Federal Reserve said today that it will deploy an additional $1.2 trillion to try to lower interest rates and stimulate the economy, an aggressive move aimed at containing the recession.

The central bank will increase its purchases of mortgage-backed securities by $750 billion, on top of a previously announced $500 billion. It also will double its purchases of debt in Fannie Mae and Freddie Mac to $200 billion. Those steps are intended to lower mortgage rates. The announcement of the previous purchases pushed mortgage rates down a full percentage point.

The Fed also said it will buy $300 billion in long-term Treasury bonds, a step it had previously considered but had been reluctant to act on. That move will lower long-term interest rates for the U.S. government directly and, Fed officials hope, will indirectly lower borrowing costs for businesses and individuals.

No Responses to “Fed Spends Another $1.2 Trillion On Bailout”

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  Anonymous says:

  March 19, 2009 at 1:01 am

  Is this really supposed to help anything? Actually yes. Lower interest rates = lower monthly payments. Right or wrong, that’s the only thing most people look at.Joe B.

   
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  Dollars and Sense says:

  March 19, 2009 at 5:24 pm

  Joe,Understood, but in market where overinflated prices are still falling back to historical norms, this will provide very little bang for the megabucks.