Fed Announces More Bond Buying

The Federal Reserve announced on Thursday that it would launch a new round of bond buying in an effort to boost the economy. As Chairman Ben Bernanke held a press conference Thursday to discuss the changes, stocks rallied and the Dow rose 200 points. Bernanke cautioned that the Fed could not offset the effects of the fiscal cliff, and singled out Congress. “Monetary policy as I've said many times is not panacea. It is not by itself able to solve these problems. We are looking for policymakers in other areas to do their part.” The central bank plans to buy $40 billion of agency mortgage-backed securities each month on an open-ended basis and will also continue to sell short-term bonds in order to buy longer-term bonds.