Fed starts a blaze -oil price mounting

ntv

The heavy support measures of the FED for the US economy had the oil price mount to 51 $ on thursday. A barrel of light crude WTI costed 51.40$. The sort Brent was available for 50.80. The decision of the FED to pump 1 billion into the economy and to buy state bonds for the first time in 60 years had investors speculating about a recovery coming soon and thus an increased demand in oil.

The oil price is driven higher by the drop of the US-dollar and the measures of the FED. But I think even more is caused by the hope that the support causes a turn in the US-economy or at least stabilizes it explained David Moore raw material strategist at the Commonwealth Bank of Australia.

ntv: Three bombs dropped

The decision of the FED to increase the volume of its stock-buying-program for the improvement of the liquidity-infrastructure of the economy and from now on to buy long term treasuries, was taken by experts with surprise. Eventually agreement weighed heavier. At the markets heavy responses were to be observed: bonds were bullish as well as gold, stocks rose also.

"the fed stays true to itself: at an important junction during the current crisis it did decide for the more aggressive solution" commented Commerzbank economist Bernd Weidensteiner what happened.
The excessivity of the program is astonishing, the fed isnt hoping for the idea that economy has gone thru the worst.

UniCredit chief economist Marco Annunziata even took some image out of military slang: " The fed dropped three bombs above the stock exchanges which were only prepared for a pretty unspectecular statement."

"Usage of all available means"
The fed will pump 1 billion $ additionally into the markets for the support of the financial and housing sector. How the fed announced , it will buy upto 750 billion $ in loan-insured stock.
Furthermore state bonds worth more than 300 bio $ will be bought to dump interest rates at several markets.
By it, the credit crisis and housing crisis should be overcome.
Furthermore the key rate of the FED remained at hardly above 0 what was determined in dec.