Fed Announcement Reveals Plans to Buy Securities

Federal Reserve aims to lower interest rates

United States Federal Reserve headquarters

The United States Federal Reserve said today that it will spent another $1.2 trillion to stimulate the economy. The Fed’s announcement has already cause stocks and oil prices to rally.

The Fed said it its announcement that it is trying to lower interest rates and contain the recession.

Project lower mortgages

The Fed plans to purchase an additional $750 billion in mortgage-backed securities. It will also double the amount it planned to spend on debt purchases from Fannie Mae and Freddi Mac. That will now cost $200 billion. That move is intended to lower mortgage rates.

Interested in interest

The Fed will also purchase $300 billion in long-term Treasury bonds. That will lower interest rates for the government, which should translate into lower borrowing costs to businesses as well as individuals seeking personal loans.

Market activity

The Fed announcement regarding the Treasury bonds caused oil prices to climb back upward today after the market on oil futures had closed. After-hours electronic trading spiked immediately following the Fed announcement. ... click here to read the rest of the article titled "Fed Announcement Reveals Plans to Buy Securities"