OK, so the Fed said it will purchase a) up to $100 billion in GSE debt and b) up to $500 billion in mortgage-backed securities backed by the GSEs. Why is this important? Michael Feroli of JPMorgan Chase says "it will measurably improve conditions in the mortgage markets and will have beneficial effects on housing and the broader economy." Ed Yardeni says the plan "significantly increases the odds of a recovery in housing and in the economy. We should all give thanks to the Fed."
The other big news the new $200 billion lending facility to holders of consumer/small business-related asset-backed securities. Again, Feroli: "While previous facilities have generally been aimed at improving conditions for financial markets and financial institutions, this facility is more clearly geared toward directly providing credit to nonfinancial borrowers."