As the credit crunch and housing issues worsen, analysts are beginning to wonder whether the Federal Reserve will make an unconventional move to prop up the economy. Michael Feroli of JPMorgan Chase said Wall Street was becoming particularly interested in two options. The first would be for the central bank to lend to financial institutions besides banks. The second option is for the Fed to directly buy Fannie Mae and Freddie Mac debt or their mortgage-backed securities. Fed officials say evaluating all kinds of ideas and rejecting most is the prudent course.
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