OK, explain this to me, please! Fed will buy $300B in longer-term U.S. debt

[napi21]

http://atlanta.bizjournals.com/atlanta/stories/2009/03/16/daily59.html?ana=e_du_pap

Perhapse I'm getting stupid in my old age, but how does "The Fed" buying US debt make any difference to the recession?

I know the Fed is NOT a gov't entity. I used to work for them years ago. I still don't understand how this would make any difference to the recession situation because the Fed is NOT a private entit either! It's about as close as you can get to being a federal entity as you can get without being one!

[WeDidIt]

1. Because then the US can seek creditors elsewhere for another $300B?

:shrug:

you've got me.

[exboyfil]

4. Beginning of the debt monetization process?

[Kansas Wyatt]

2. Has to do with China getting nervous.

It was reported a few days ago, along with their plans to sell long term debt in favor of short term debt.

[scheming daemons]

3. Because it causes downward pressure on interest rates

By next week, there will be 4% fixed rate mortgages available.

[katanalori]

5. because the Capital Markets need to be stabilized

as well as the banking sectors - all good.