FED CONSIDERING ISSUING ITS OWN DEBT
The Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets.
Government debt issuance is largely the province of the Treasury Department, and the Fed already can print as much money as it wants. But as the credit crisis drags on and the economy suffers from recession, Fed officials are looking broadly for new financial tools.
The Fed stepped in with emergency credit for the investment bank, Bear Stearns, in March and the insurer American International Group, in September, and threw open its direct loan window to Wall Street firms this year in a bid to stabilize financial markets amid a credit freeze.
But with the credit crisis showing no signs of abating, and the narrow scope for further interest rate cuts from the present levels of 1 percent, economists expect the Fed to look at new ways to bolster the supply and circulation of money to avoid a deflationary slump
Felipe said,
December 16, 2008 at 9:17 pm
I didn’t know that, is that true? I can believe that America is trying to do that, but we´ll se what is going to happen.
Oharas said,
December 16, 2008 at 10:12 pm
After I haven’t seen this news before, now Im reading about it everywhere. It surprise me everytime, I don’t know if this can happen in the US but what I know It´s true when they say that they can print as much money as they want.
Alisha said,
December 17, 2008 at 5:23 pm
This plus the rate cut yesterday for the FED is gonna be so bad for all of us, What we are suppose to do?
Gilbert said,
December 17, 2008 at 8:33 pm
I know people this is bad, this can be just the beginning of something worse. I don’t want that, but everything is going down.
clark said,
December 18, 2008 at 10:05 pm
That´s interesting, we know we were bad, but not so much than this.