Reuters (03/20/08); Rucker, Patrick
Efforts are being made to pump liquidity into the mortgage markets to ease the credit crunch and head off a recession. A decision by Fannie Mae and Freddie Mac's regulator to ease capital requirements will pump $200 billion into the markets, while additional liquidity is expected if the regulator of the Federal Home Loan Bank System approves a plan to increase some mortgage holdings two-fold to approximately $300 billion. According to RBC Capital Markets currency strategist David Watt, "All hands are on deck to try and prevent this U.S. situation from becoming a dire crisis. They're doing everything they can, making policy on the fly."
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