Central banks in Asia, Europe and the United States injected billions of dollars into global money markets Tuesday in an attempt to contain the damage to the financial system prompted by the collapse of Lehman Brothers Holdings Inc.
The U.S. Federal Reserve pumped in US$50 billion Tuesday morning, and signalled there would be more to come later in the day if necessary.
The Fed said it “stands ready to arrange further operations later in the day, as needed.”
The Fed move comes on the heels of a $70 billion injection on Monday, and follows up on massive injections from central banks in Europe and Japan overnight.
The Bank of Canada intervened with $2.3 billion on Monday.
Today’s action by the Fed comes ahead of this afternoon’s interest rate announcement.
Some analysts says thehe financial system turmoil raises the odds the Fed will cut rates. Others still predict the Fed will hold its key rate steady at 2%.
Fed pumps US$50 billion into financial system
IE Staff