Commercial-paper market gets lifeline from Fed lending program

10/8/2008 | Financial Times (free content)

The Federal Reserve launched a commercial-paper lending facility intended to break through paralysis of the commercial-paper market. "This endeavor should largely eliminate the blockage that we had expected would continue through year-end if policymakers did not act," said T.J. Marta, a strategist at RBC Capital Markets. Rates on what little commercial paper is still trading spiked just before the Fed announced that it will start buying three-month unsecured and asset-backed commercial paper.

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