Federal Reserve plan stuns investors

By Krishna Guha in Washington

Published: March 18 2009 18:17 | Last updated: March 18 2009 23:40

The Federal Reserve on Wednesday stunned investors by announcing plans to buy $300bn of US government debt, triggering a plunge in bond yields and the dollar.

In a further display of aggression, the US central bank also said it was more than doubling its purchases of securities issued by housing giants Fannie Mae and Freddie Mac to $1,450bn. It said it now expected to keep interest rates near zero for an “extended periodâ€