Fed pumps $1.15 trillion into US economy
Thursday 19th March 2009, 9:40AM GMT.
The Federal Reserve has announced plans to buy more than $300 billion (£210 billion) in government debt.
The United States central bank said it would also increase the amount of mortgage-backed securities it was purchasing by $750 billion (£525 billion).
A statement from the Fed added that the bank planned to pick up more than $100 billion (£70 billion) in other federal agency debt as well.
On Wall Street the Dow Jones was boosted by the shock move – the Fed has not purchase treasury bonds since the 1960s – and closed 1.2 per cent higher.
The measures are designed to revive the flagging US economy in a similar move adopted by the Bank of England’s decision to begin quantitative easing.
“Although the near-term economic outlook is weak, the committee anticipates that policy actions… will contribute to a gradual resumption of sustainable economic growth,” the Fed said.
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