The Meltdown

Fed Launches New Rescue

The stock market has been quietly ascendant over the past week, but that doesn’t mean the Federal Reserve’s rescue efforts are over: The central bank will purchase an additional $750 billion worth of government-guaranteed mortgage-backed securities, as well as buying $300 billion worth of longer-term Treasury securities over the next six months. "Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending," the Fed said, adding it's planning to "employ all available tools to promote economic recovery and preserve price stability." The Fed's surprise move, along with its decision to keep the benchmark interest rate at virtually zero, pushed stocks higher today, and on the bond markets, prices rose and yields dropped sharply.