NEW YORK ( TheStreet.com) -- In an attempt to bolster the U.S. economy and save the commercial real estate market, the Federal Reserve extended its Term Asset-Backed Securities Loan Facility (TALF) program by three to six months.

The extension is aimed at providing more help for the credit markets and preventing an already battered sector (commercial real estate) from falling even further. Many observers, however, are skeptical that it will work.

On one hand, the program has the potential to generate up to $1 trillion in lending to households and businesses by enabling investors to use program funds to buy new asset-backed securities backed by auto and student loans, credit cards, business equipment and loans guaranteed by the Small Business Administration, as well as commercial real estate debt.

Already, the TALF loans have reduced borrowing costs in some markets. Since the program began in March, the gap, or spread, on top-rated securities backed by consumer loans relative to benchmark interest rates has fallen to 0.60 of a percentage point, and the spread on triple-A-rated debt backed by commercial real estate has dropped 7.2% to 4.6 percentage points more than U.S. Treasuries, according to Barclays Capital.

On the other hand, many believe that consumer spending and confidence is the only thing that will prevent the commercial real estate market from weakening. It is the consumer that drives corporate revenues, which enable companies to prosper and grow. Corporate America will not add additional square footage in times of lean management, even though it may beat Wall Street's profit expectations.

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