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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Fed Pumps Billions More Into System

The Federal Reserve today expanded its efforts to try to pump cash into the nation's banking system. For the past week, banks have been hoarding cash, driving the rates that they lend to each other up sharply. That has the effect of making it more expensive for ordinary consumers and businesses to borrow.

The Fed said today it will triple the size of its 84-day "term auction facility," which essentially pushes money into the financial system, to $75 billion. It will also add two new funding auctions totaling $150 billion, to be conducted in November.

And the Fed expanded its lines of credit to foreign central banks, which is intended to get dollars into banks in Britain, continental Europe, Canada, Japan, and elsewhere, to $620 billion, from $290 billion.

--Neil Irwin

By Frank Ahrens  |  September 29, 2008; 10:27 AM ET
Categories:  The Ticker  
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Comments

Look at the billions already being thrown around!!!! The banks have created a quadrillion dollars of derivatives. $700 billion is a drop in the derivatives ocean and will only help greedy Wall Street bankers. It will do bupkus to arrest the derivatives unwind currently going on and that unwind HAS to happen or we will never get out from under this monstrosity greed on Wall Street has created.

Posted by: Anonymous | September 29, 1908 10:47 AM | Report abuse

It's nice of the banks to hoard cash so that the US Government [taxpayers] can bail them out.

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Posted by: Jim | September 29, 1908 11:18 AM | Report abuse

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