The Federal Reserve is taking action to try to give the flagging U.S. economy a much-needed jolt by committing to buy up some of the government’s debt in the form of long-term Treasury securities.

The Fed’s announcement came in tandem with the gloomy news on Tuesday that America’s economic recovery is likely to be “more modest in the near term than had been anticipated.” Nice with the “more modest,” there, but to translate this message from governmentese, we can deduce that the situation is going to stink for a good while to come. –KA

BBC:

In a statement, the Fed said the pace of recovery had slowed in recent months and is likely to be “more modest in the near term than had been anticipated”.

“Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit,” the central bank said.

Some analysts say the move could mean that money can be borrowed cheaply for a longer period of time.

“The Fed’s investments in longer-dated Treasury debt should … lower mortgage and other borrowing rates,” Stephen Gallagher and Aneta Markowska from Societe Generale commented.

Others believe the Fed will have to take further steps in the coming months.

Read more

Wait, before you go…

If you're reading this, you probably already know that non-profit, independent journalism is under threat worldwide. Independent news sites are overshadowed by larger heavily funded mainstream media that inundate us with hype and noise that barely scratch the surface.  We believe that our readers deserve to know the full story. Truthdig writers bravely dig beneath the headlines to give you thought-provoking, investigative reporting and analysis that tells you what’s really happening and who’s rolling up their sleeves to do something about it.

Like you, we believe a well-informed public that doesn’t have blind faith in the status quo can help change the world. Your contribution of as little as $5 monthly or $35 annually will make you a groundbreaking member and lays the foundation of our work.

Support Truthdig