U.S. officials pledged to pump another $800 billion into ailing credit markets, much of it directly from the Federal Reserve -- a move that makes the nation's central bank a lender to almost every corner of American life.
The Fed, whose traditional lending role has been to make emergency loans to banks, plans to purchase in coming months up to $600 billion of debt issued or backed by Fannie Mae, Freddie Mac, Ginnie Mae and Federal Home Loan Banks, all mortgage-finance businesses with close ties to the government.
In addition, with support from the U.S. Treasury, the Fed will provide up to $200 billion in financing to investors buying securities tied to student loans, car loans, credit-card debt and small-business loans.
The intervention, the latest in a series of unprecedented government actions, immediately pushed down rates on 30-year mortgages by as much as one-half percentage point. Lower rates could help borrowers looking to refinance or buy homes, and potentially bolster ailing housing markets.
Wall Street Journal