The announcement which moved the markets yesterday constitute pumping in a further 200 billion USD of liquidity in the US banking system. I recommend all to take a look at the article below.
Excerpts from the report:
"The new program lets the brokerages borrow for 28 days, but more significantly, it allows the brokerages to offload a broader array of mortgage paper, which has been the bane of their existence since the credit crisis began last fall. If they can get those mortgages off their balance sheets, even if for just a short while, they will have more flexibility to make new loans.
Significantly for the Fed, the new program (which it is inelegantly calling its "term securities lending facility") is designed to be "reserve neutral," meaning it won't increase the nation's money supply to the point where it sparks inflation."
