This All Happen due to that Statement By Fed, The Fed said, "there are significant downside risks to the economic outlook, including strains in global financial markets."Fed Wednesday said it would replace USD 400 billion of the shorter duration Treasury securities it holds with the same amount of 6- to 30-year Treasurys. It also said that it would buy mortgage securities with the runoff from maturing mortgages in its portfolio. But it also talked about a slow recovery, slow improvement in unemployment and new risks from Europe. Traders concerned that the Fed's efforts will not result in much improvement to the economy.
The Fed action Wednesday also came a day after Republican leaders in Congress sent a letter to Fed Chairman Ben Bernanke asking him to refrain from further stimulus.The unusual act ruffled some in the markets who took it as an assault on the Fed's independence.
The Fed action Wednesday also came a day after Republican leaders in Congress sent a letter to Fed Chairman Ben Bernanke asking him to refrain from further stimulus.The unusual act ruffled some in the markets who took it as an assault on the Fed's independence.
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