$30bn auctioned by the Federal Reserve

by Richard Kilner

Story link: $30bn auctioned by the Federal Reserve

The Federal Reserve has auctioned another $30bn of funds to commercial banks in its continuing effort to ease the effects of the credit crunch.

This time, the sixth such auction, the funds have an interest rate of 3.08%.

Altogether the Federal Reserve has injected $160bn into the system using the auctions.

The method is aimed at loosening up lending and credit, so that the credit crunch does not exacerbate the slowdown in the economy that the US is facing at present.

The auctions are part of the Federal Reserve’s fight against recession, as too was the aggressive rate slashing of 125 basis points the central bank engaged upon recently.

Today will see chairman Ben Bernanke present his biannual report to Congress, with financial analysts watching closely for hints of possible rate cuts in the future.