Some Bullet Points

-- The Federal Reserve lowered their target for the Federal Funds rate to 1.50% in a coordinated central bank ease. What effect will this have? Well, not much. The effective Fed Funds rate has averaged 1.32% since 9/19/08. Taking out the extremes because of quarter end, the median has been 1.21% in the same period. So the Fed really "lowered" the rate 3 weeks ago. Some adjustable rate loans are reset to Fed Funds, so there may be some marginal benefit to mortgage borrowers.

-- The size of the Fed's balance sheet is now $1.5 trillion. It has increased by $626 billion in 12 months. A category labeled "Other Loans" has increased by $409 billion. Their Treasury holdings have dropped by $303 billion. One year ago, the Fed held $1 in capital for each $25.16 in assets. Today, they hold $1 in capital for each $36.31 in assets.

-- On September 17 of this year, the U.S. Treasury initiated the Supplementary Financing Program. Under this program, Treasury Bills are issued and the proceeds are deposited at the Fed (segregated from other Treasury accounts). This has supplied the Fed with over $344 billion so far.