Fed Makes Another Liquidity Move

Updated from 9:02 a.m. EDT

The Federal Reserve on Tuesday said it was prepared to pump another $200 billion in liquidity into credit-starved markets through a new facility that will lend Treasuries in exchange for mortgage-related paper that has been difficult to trade.

The new Term Securities Lending Facility will lend Treasury securities to primary dealers for 28 days in exchange for collateral including debt and residential-mortgage-backed securities from government-sponsored entities Fannie Mae(FNM Quote) and Freddie Mac(FRE Quote) (MBS), as well as non-agency AAA/Aaa-rated private-label residential mortgage-backed securities. ...