The US Federal Reserve, in another massive life-support intervention for the US financial system, today announced a $600 billion program to buy mortgage-related debt and securities and a $200 billion facility to support consumer debt securities.
The US central bank said it would buy up to $100 billion in debt issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, the government-sponsored mortgage finance enterprises.
The Fed also said it would buy up to $500 billion in mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.
The move is intended to strike at the heart of US economic woes, the collapsed housing market.
"This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved financial conditions more generally," the Fed said in a statement.
The central bank also launched a $200 billion facility to back consumer loans, including student, auto, and credit card loans and loans backed by the federal Small Business Administration.
Reuters