Reuters Fed to buy long-term U.S. government debt

WASHINGTON (Reuters) - The Federal Reserve on Wednesday said it would pump an additional $1 trillion into the U.S. economy to try to pull it out of a deep recession, partly by buying longer-term government debt for the first time in more than 40 years.

In a statement at the end of a regular two-day policy meeting, the central bank's panel said it would buy up to $300 billion in longer-term Treasuries.

The decision caught many off guard. While the Fed has said it was considering such a move, it had seemed to be backing away from it recent weeks. As recently as March 6, New York Fed President William Dudley had said such a move would not be the most efficient way to ease market conditions.

The surprise announcement jolted markets. U.S. stocks shot higher and yields on U.S. government bonds took their biggest one-day tumbled since 1987, while the dollar plunged to a two-month low against the euro. more...