Fed to buy corporate debt to unfreeze lending
The Federal Reserve announced Tuesday it will start buying up corporate debt in attempt to jumpstart the markets and boost lending to businesses.
Fed Chairman Ben Bernanke said this measure is necessary to ensure that companies that rely on short-term loans will be able to carry on with their day-to-day operations, such as making payroll.
?These tools will provide important additional support to the government efforts to strengthen the markets and the economy,? Bernanke said.
Bernanke also hinted that another interest rate cut may be on the way.
In the meantime, Dow Jones dropped by another 500 points and congressional officials responsible for overseeing the budget announced that pension plans have lost nearly $2 trillion over the past year.
Speaking to a room full of entrepreneurs in Dallas, President Bush denied the economy has slipped into a recession and assured the public that the government is doing all it can to end the crisis.
?I understand the American frustrations more than you know,? Bush said.
The Central Bank is expected to hold a meeting at the end of October to decide whether or not to slash interest rates.