March 18th, 2009
03:14 PM ET

Fed buying $300B in treasurys

Chris Isidore

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/03/18/art.fed.meeting.jpg]

The Federal Reserve announced Wednesday it would buy $300 billion of long-term Treasurys over the next six months in order to try and get credit flowing more freely again.

The Fed also announced plans to buy an additional $750 billion in mortgage-backed securities, a move designed to lower mortgage rates.

The Fed suggested it was planning to buy Treasurys in statements issued after the two previous meetings of the Federal Open Market Committee, the policymaking committee of the Fed that sets interest rates. So Wednesday's announcement, which came at the conclusion of the FOMC's latest meeting, was not a major surprise.

Filed under: Economy
soundoff (24 Responses)
  1. Cliff John (Lynnwood, WA)

    Impressive....whatever works, just do it! In this economy, it is better to be active than passive.

    Also, the gov't buying mortgage-backed securities sounds like a good plan, not just lowering interest rates, but enticing people to invest in real estate.

    Keep it up!

    March 19, 2009 at 4:37 am |
  2. kevin

    D.C. is becoming a circus. These stupid law makers are wasting time and effort on the bonus's when they themselves are responsible for this entire mess. The US lawmaker are the reson we are all in this situation. They should all lose thyeir jobs. AIG bonus's what a joke 160M out of a Trillion dollars. GIVE ME A BREAK. These lawmaker were asleep at the wheel. They are to blame.

    March 19, 2009 at 1:14 am |
  3. JC-Los Angeles

    The Fed is going to buy $750 billion of mortgage backed securities so they can lower mortgage rates? huh? say what? come again?

    Surely, it can't be me; how about raising interest rates so only those that can actually afford the most expensive purchase of their lives partake in the purchase of a home.

    It's the height of hypocrisy to try to get Americans to buy things with cheap money when all our problems came from people buying things with cheap money.

    Earth to leadership: raise interest rates so people don't live over their means and actually watch every dollar.

    You can't make this stuff up; failures one and all.

    March 18, 2009 at 6:35 pm |
  4. Sondra

    Why can't the government give the money to us? There are 300,000,000,000 in America, give each citzen $2,500 for a total of $750,000,000,000. That will give the PEOPLE a chance to pay their bills, buy food, fix their cars and maybe smile walking out of the bank instead of walking out dazed, confused and pissed off. I'm tried of hearing about the banks and other business getting our money; give it to us and let us stimulate the economy. President Obama needs to put some real people on his economic advisors team. The team leader Christine Rome presents herself as a out of touch snob. Do they really think an extra $60.00 a month in our payroll check is going to ease the burden? Give me a break, they give us a crumb and we're to jump for joy.

    March 18, 2009 at 5:58 pm |
  5. Neo

    Can the average american afford their house? If not, then lower housing costs until they are affordable, across the board. The avg. american should have enough CASH for a home, tax, their auto, food and clothing. I say start by re-appreciating homes @ 10% below their value. Then re-finance on that rate. In about a year or two everyone should be caught up. Going forward housing prices should increase at a slower pace then they did in these recent times. That led to instability.

    March 18, 2009 at 5:58 pm |
  6. j nichol

    so many people are refiencing there homes though the us department of hud do they know about all the fees?do they know that hud will later sell there morgages to someone else 5 6 years down the road! do they know that they are not federal regulated banks there sending them to.do they know that the next morgage company will take them for a ride of there life.more fees and more fees they will be paying double for the house.or force you to forclose 10 15years later after they took thousands from u already. my guess is that they will all remorgage though hud fha and va and another 5 10 year s we will have another melt down.when they sell them ;where do u get help when the us department of hud sells to ocwen?i would really love to know how many people that had subprime loans va fha though hud in 1988 still have the homes.

    March 18, 2009 at 5:56 pm |
  7. Annie Kate

    With all this buying and selling who exactly owns this country now? And what do we do if the countries buying out debt decides to call the loan? I think we are just digging our hole bigger - I'm past trying to understand all this and just hope it will work.

    March 18, 2009 at 5:29 pm |
  8. Is

    Albert Einstein said: "The significant problems we face cannot be solved by the same level of thinking that created them"

    That's the main problem/issue we have with this economic disaster...

    March 18, 2009 at 5:19 pm |
  9. Rob

    I'd like to know what Hank Paulson is doing now? He seems to have diasppeared.

    March 18, 2009 at 5:17 pm |
  10. mertz

    yeah i saw this on BNN, and i didn't even blink once. i wasn't surprised. i was so angry from watching the how many hours of the finance committee this afternoon that i changed the channel and caught that news. i wasn't even relieved or happy. i was too angry and depressed to care anymore. i mean what is the point of fed doing all of this...and not raising the interest rates. really. is our economy going to be okay soon, so that i don't need to continue eating canned food. ugh. anyone who follows the news knows this was going to happen. this is nothing new, so they can't expect a reaction.

    March 18, 2009 at 5:07 pm |
  11. Eric Chambers

    OK so the US Government is buying $300 billion in treasurys. Why is this not necessarily good news?

    March 18, 2009 at 5:07 pm |
  12. Lisa in CA

    They can give out all the loans they want - if wages are still low and people still have debt to pay, we are still going to be behind. I get a job, I'm not thinking of buying things, rather I need to pay on my debts that haven't been paid. Drop interest rates (i.e., credit cards) for us individuals to free up cash to spend. Until that happens, any free cash I may have is going to pay those credit cards. It's a shame that the financial institutions haven't figured that one out. Keep raising the rates and people will be filing bankruptcies ... and no one wins.

    I'd be curious to know if personal bankruptcies are up from a year ago.

    March 18, 2009 at 4:30 pm |

    it is simple to me! Get the banks lending and jobs will be available and money will be spending. Isn't that easy? So whats wrong now?

    March 18, 2009 at 4:26 pm |
  14. Alfred Thornton - Cazadero, CA

    We don't want to beat the horse (Feds) while it is pulling an overloaded cart uphill. There will be plenty of time for blaming after the economy has stable legs to stand on. I am sure everyone knows how hard it is to run an job or office when you are short staffed.

    March 18, 2009 at 4:20 pm |
  15. Michael C. McHugh

    Once again, I would suggest that we just let the Fed prop up Social Security and a Medicare program that expands coverage to the uninsured. If it has billions and trillions to through around, then why not just send some of this down to the common people?

    March 18, 2009 at 4:12 pm |
  16. Isabel, Brazil

    Has someone seen so many billions together? And yet, without solve the problem?

    March 18, 2009 at 4:09 pm |
  17. Suzanne

    This AIG mess probably was done by design, as they new about this since January and chose to turn a cheek and did nothing to stop it. Further more, its will drag on for many weeks smoke clouding the many real issues that affect tax payers and like that of those people loosing their home while they continue nuking this so called mistake/over site for many weeks even months to come!

    Also what's really happening with 1099c issued on credit cards and mortgage loans? To add insult to injury after they take beck your home, the banks give you a 1099c showing the amount they wrote off with you and you are then expecting you to pay income tax on the banks loss as though it was income to you?

    Can you please tell me is there any new news as to if and when "cram down", will pass? MAIN STREET NEEDS A RESCUE PLAN TOO...................

    March 18, 2009 at 4:08 pm |
  18. KAZ

    I also smell disaster. We are neck deep in trying to regulate the markets.
    We have not done a very good job so far throwing good money after bad. We have know oversight because too much money is out there.
    Who is watching the Stimulus money, the bailout money, the home mortage money. trust me from week to week we will learn of some abuse.

    March 18, 2009 at 3:57 pm |
  19. Richard

    Where are they getting all of this money from? Maybe that is the wrong question..maybe you/we should be asking how long they have been budgeting for this? It seems as if they are spending so much money that maybe, just maybe they had already prepared for this by setting money aside...

    hmmm, whats that smell? something smells fishy

    March 18, 2009 at 3:55 pm |
  20. sharon from Indy

    It is outrageous that AIG employees are getting death threats! Yes, the American people ar furious. Death threats won't accomplish anything except fear.

    Congress....act like a grown-up and let the child AIG face the consequences.

    March 18, 2009 at 3:46 pm |

    Dear Anderson,

    How can Mr Liddy of A.I.G. think so highly and defend people that have accepted millions of dollars from the American people. We are the tax payers who have lost our jobs, out homes, we cannot afford to put food on the table. We cannot afford to give anymore tax payer money to these greedy people with no regard to what the American people are going through. They need to give the money back, not 50% all of it.

    March 18, 2009 at 3:38 pm |
  22. Michael "C" Lorton, Virginia

    There seems to be a tremendous amount of "buying" and "lending" by the Feds--–can someone tell me where are they getting all of this money?---of course--I already know the answer--I smell a tax increase around the corner for Americans-and it will be sooner than later.

    March 18, 2009 at 3:36 pm |
  23. James McNett

    I ask why Senator Dodd and Representative Frank haven't stepped down from their committee positions and then retired from the congress. They provided no effective oversight and woefully underperformed at their jobs.

    March 18, 2009 at 3:34 pm |
  24. Joe G. (Illinois)

    So in other what you are saying is that: Why stop with Freddy Mac and Freddy Mae.. Let it continue with the US Gov and then Communist Republic of China.. Is that how you supposed to do it?! Ok then if you say so..

    March 18, 2009 at 3:27 pm |