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Thread: Stocks surge after Fed's new move

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[quote=GUEST9941,275088]Source: FT.

Stocks surged and bonds fell in early trading yesterday after the Federal Reserve took its most radical step yet to reverse liquidity strains in financial markets, backed up by smaller moves from other central banks.
In its second big intervention since Friday, the US central bank announced that it would lend primary dealers in the bond market up to $200bn in Treasury securities for a month at a time and accept ordinary AAA-rated mortgage-backed securities as collateral in return.The latest Fed move is designed to ease liquidity strains in financial markets by allowing primary dealers to swap their mortgage-backed securities for Treasuries, which they can in turn use to raise cash. 
                                  
option of buying mortgage-backed securities in its oAnalysts said it took the US central bank a step closer to the nuclear options of buying mortgage-backed securities in its own , although it stopped clearly short of such an extreme move.

Why did the stock market react so actively? Is it useful?
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