US Fed pumps billions in market

The US Federal Reserve is to pump US$800 billion into the markets in another bid to deal with the financial crisis.



The US central bank said it will use 600 billion to buy-up mortgage-backed securities to help encourage lending.



Separately the Fed also unveiled a $200 billion plan to help unfreeze the consumer credit market.



As the credit crisis deepens, banks and other financial institutions have been reluctant to lend.



Under this new rescue plan, which is in addition to the already announced $700 billion bank bail-out - the Fed is to buy up to $100 billion in debt from the troubled mortgage giants Fannie Mae and Freddie Mac.



The central bank said it would also buy another $500 billion in mortgage-backed securities, pools of mortgages that are bundled together and sold to investors.