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US central bank pumps $41 bln into market

One day after reducing interest rates, the US central bank Thursday pumped another $41 billion into the banking system to help stem the deepening credit crisis in the mortgage markets.

It was the largest one-day infusion since August 10, when the Federal Reserve lent $38 billion to the nation’s banks. Market observers were surprised by the large amount, which they saw as proof of the continuing liquidity crisis in the banking system. The US central bank’s open market operations have authority to intervene whenever it is necessary to broaden or narrow financial liquidity. (m&c.com)