Finally, those living in the best- known street in the US – Main Street – are seeing federal aid of their very own, says Lex. The Fed on Tuesday announced two facilities aiming to bring mortgage rates down and restart lending to students, small businesses, on credit cards and to car buyers. The Fed, in one sense, is clearing up the unintended consequences of bail-outs past. After taking most of the risk in Citi’s latest rescue package, it is clearly in expansive mode, potentially adding about $800bn to its already heaving balance sheet. But as government schemes proliferate, the nearer-term concern is whether such facilities will succeed in boosting lending and, of course, borrowing. House prices continue to tumble and unemployment is rising. Main Street may prefer to hunker down for winter rather than revive the free-spending ways of the past.

This entry was posted by Gwen Robinson on Wednesday, November 26th, 2008 at 5:33 and is filed under Capital markets. Edit this entry.