Fed to Buy $300 Billion Worth of Long-Term Treasury Bonds
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The Federal Reserve says it will start buying long-term government bonds, opening a new front in its battle to lift the U.S. out of recession.
The Fed says it will buy up to $300 billion in long-term Treasury securities over the next six months.
Doing so could help the economy because many kinds of debt — from mortgages to corporate bonds — are linked to Treasury rates. Fed purchases would boost Treasury prices and drive down their rates. That would ripple through and lower rates on other kinds of debt.
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The Fed left a key bank lending rate at a record low of between zero and 0.25 percent.
The Fed also will buy more mortgage-backed securities and debt guaranteed by Fannie Mae and Freddie Mac in a move to help that market.