Fed provides assistance but markets fall

The Federal Reserve Bank provided some good news yesterday, ensuring rates are kept low long term by purchasing long term maturing debt to the tune of US 400 million and selling this amount short term. This should keep short term interest rates across the board lower and help the consumer and business looking to borrow .

This alone would have helped markets looking for good news but it came with comments confirming that the Fed thinks the current global economic recovery is fragile and that there are big risks on the downside. Hearing this, the Dow Jones fell off a cliff late in US trading and most equity markets around the globe have followed the US lower, by around 2% on average.

Europe is expected to follow suit with similar losses today.