Fed keeps rates at low rate; signals interest in buying federal debt
by January 28, 2009 2:47 pm 47 views
The Open Market Committee of the Federal Reserve voted 8-1 Wednesday to hold its prime overnight interest rates between zero and 0.25 percent. The committee indicated that the rates could remain at the unusually low levels for some time.
Also, the Fed said it would consider buying U.S. Treasury securities (long-term debt) if it would help stimulate private credit markets.
Despite continued news of massive layoffs and the expectation that Friday’s GDP report will be negative, the stock markets surged ahead on the news that the Fed could invest in Treasury securities. The Dow Jones Industrials were up more than 165 point about 30 minutes before the market close.
Link here for the Fed statement.