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Fed Pumps $19B Into Market

Posted Aug 10, 07 8:39 AM CDT in Business 

(Newser) – The Federal Reserve pumped $19 billion in temporary funds into the banking system today by buying up mortgage-backed securities. The move is aimed to insure that there is enough cash available in the credit markets and keep the interest rate close to the Fed's target of 5.25%. It also makes it clear that the Fed does not yet plan to cut that interest rate, Bloomberg reports.

The Fed also added $24 billion yesterday, the most since April. The additions have dropped the federal funds' rate down to 5.375%, after it began trading at 6%. "It looks like this will be enough to address the problem today because of the pace at which the funds rate moved down," says a market strategist.

Source Bloomberg

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Traders move around the floor of the New York Stock Exchange in the minutes before the closing bell, Tuesday, Aug. 7, 2007. Wall Street overcame disappointment in the Federal Reserve's failure to move...   (Associated Press)
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