Next Bubble May Be in Treasuries

Plan to buy Treasuries, mortgage-backed securities stirs stocks

(NEWSER) - Stocks slumped today until the announcement of the Federal Reserve’s plans to buy billions in Treasuries and mortgage-backed securities, which caused a minor rally in equities, the Wall Street Journal reports. Treasury prices surged and yields plummeted. The Dow gained 90.88 to close at 7,486.58. The Nasdaq rose 29.11, closing at 1,491.22, and the S&P 500 rose 16.23 to settle at 794.35. More»

Latest intervention hopes to lower lending costs

(NEWSER) - The Fed plans buy up to $300 billion in long-term Treasury securities in an attempt to make lending more affordable, the Wall Street Journal reports. The massive buy is intended to push down interest rates on consumer loans and corporate bonds, which are linked to yields T-bills. The Fed will also buy $750 billion of mortgage-backed securities—above $500 billion it is currently buying—in order to raise the assets’ prices. More»

Shrugs off good economic news, says employment still in trouble

(AP) - The Federal Reserve unanimously agreed to extend its $600 billion Treasury bond-purchase program today, saying the economy isn't growing fast enough to lower unemployment. The decision came from a new lineup of voting members that includes two officials who have criticized the bond purchases. They have said the purchases could eventually ignite inflation or speculative buying in assets like stocks. More»

(NEWSER) - The Federal Reserve has slowed its recovery-minded plan to purchase Treasury securities but said that "economic activity is leveling out," the Wall Street Journal reports. The Fed’s policy committee hopes to complete its $300 billion purchase of Treasury securities by October—originally slated for September—and also plans to keep interest rates near zero, saying it “continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate.” More»

Economy's dive prompts central bank to get more creative with financing programs

(NEWSER) - The Federal Reserve’s balance sheet has more than doubled to $2 trillion since August as it’s financed new programs and bailed out ailing businesses, prompting the central bank to weigh issuing its own debt for the first time, reports the Wall Street Journal. The Fed, looking for new tools to address the crisis, already has begun talks with Congress. More»