Fed plans to flood financial system with $1.2 trillion

As part of its efforts to stabilize the economy, the Federal Reserve said it will purchase mortgage-related securities and government bonds. Effectively, the Fed will print more money to pay for the program, which is designed to reduce borrowing costs for loans, including mortgages, and spur the economy. The $1.2 trillion the central bank plans to pour into the system dwarfs previous efforts and indicates an acknowledgment that the economy has worsened.

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