'Rambo Fed' comes out with all guns blazing
The US Federal Reserve said it would pump more than $1 trillion into the economy, signaling Fed Chairman Ben Bernanke's determination to avoid a repeat of the Great Depression and his willingness to spend as much as is needed to end the current crisis.
US central bankers decided to buy as much as $300 billion of long-term Treasuries and more than double mortgage-debt purchases to $1.45 trillion, aiming to lower home-loan and other interest rates. The Fed kept its main rate at almost zero and may keep it there for an "extended" time.
The moves sparked the biggest drop in 10-year Treasury yields since 1962, rallies in the stock market and gold and a plunge in the dollar against the euro. Economist Richard Hoey said Bernanke has created the "Rambo Fed," referring to the Sylvester Stallone character skilled with weapons.
