Foreign Exchange & Fixed Income

Exclusive insight into Fed policy making

Exclusive insight into Fed policy making

With benchmark U.S. interest rates already at 1 percent and heading lower, the Federal Reserve is digging deep into its tool box for ways to revive U.S. economic growth. Reuters brought fresh insight to options on the table and explored in a Dec. 3 story why the Fed is likely to start buying U.S. Treasury debt to finance a huge fiscal stimulus package. This would help lower long-term interest rates, reducing the borrowing costs for businesses, consumers and the government even as a flood of fresh debt hits the market. Longer term rates are just one concern for top Fed officials. Policy makers are also struggling with how to bring down the cost of private sector debt, which has soared compared with Treasuries. In a separate story on the same day, Reuters examined how an expected increase in corporate rating downgrades could ramp up pressure on the U.S. central bank to extend help to lower-quality borrowers. In particular, the Fed, which has been funding top-rated commercial paper issued by U.S. companies, is facing pressure to support mid-investment-grade borrowers.