The Federal Reserve announced Wednesday that it will buy $18 billion worth of government debt in a bid to jumpstart the economic recovery.
The first debt-buying operation will start on Aug. 17. In the initial phase, a total of nine operations will be conducted, with the last one taking place on Sept. 13.
The details come one day after the Fed announced that it will use proceeds from its portfolio of mortgage securities to buy longer-term U.S. Treasury debt to help boost the economy. The Fed is taking the action because the economy's growth has slowed sharply and unemployment is stuck near double digits.
The $18 billion worth of government debt the Fed is buying is small, so it's not expected to have a big impact on driving down rates on corporate debt and on mortgages, which already are near record lows. But it should push them down a little. The Fed is hoping even lower rates will spur people and companies to spend more, helping the economy to grow faster.
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