Fed to buy massive amounts of short-term debts

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Oct. 7, 2008

Fed to buy massive amounts of short-term debts
By JEANNINE AVERSA, AP Economics Writer

WASHINGTON - The Federal Reserve announced Tuesday a radical plan to buy massive amounts of short-term debts in a dramatic effort to break through a credit clog that is imperiling the economy.

The Federal Reserve, invoking Depression-era power under "unusual and exigent circumstances," will buy "commercial paper," a short-term financing mechanism that many companies rely on to finance their day-to-day operations, such as purchasing supplies or making payrolls.

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