The Federal Reserve said it was prepared to step into the financial markets to buy US Treasuries in an attempt to drive down interest rates, but it gave no clues yesterday about how soon or how broad such a programme might be.

The Fed's open market committee, chaired by Ben Bernanke, said that credit markets remained 'extremely tight' and that, with householders and small businesses finding it hard to get loans, economic activity had weakened further since its last meeting in December.

The Independent