Fed pumps cash into US economy
19-03-2009
The US central bank, the Federal Reserve, has announced plans to pump an additional trillion dollars into the financial system in an effort to lift the US economy out of its worst slump since the 1930s. The Fed, at the conclusion of a policy meeting, said it would buy up to US$300 billion in long-term US Treasury bonds over the next six months "to help improve conditions in private credit markets." The central bank also said it was boosting its purchases of mortgage securities by $750 billion, bringing its total to $1.25 trillion this year as part of a wide-ranging effort to revive the sagging US economy. The announcement was made at the end of a two-day meeting by the Federal Open Market Committee, which kept its base lending rate in a range of zero to 0.25 percent. The Fed, which had been expected to keep its federal funds rate unchanged, said it "anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The panel said that since its last meeting in January, data "indicates that the economy continues to contract" amid a deep recession that is gripping the entire world.
