With Key Rate Near Zero, Fed Scopes Out Options
WASHINGTON — Federal Reserve policymakers are wrapping up a two-day session today, but with the Fed’s key lending rate already near zero, they are not expected to announce a change.
Fed Chairman Ben Bernanke and his colleagues have pledged to use “all available tools” to jolt the economy out of recession, and economists are looking for an indication of what specifically they might do.
One option discussed at its last meeting in January is buying long-term Treasury securities. That could serve to drive down mortgage rates and help revive the ailing housing market.
Another option is expanding the Fed’s purchases of debt issued or guaranteed by mortgage gianst Fannie Mae and Freddie Mac. Mortgage rates have fallen since that program was announced late last year.
