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The Federal Reserve has pledged to cut its key interest rate. The federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. The central bank says it plans to use a variety of unconventional methods to flood the banking system with credit and drive interest rates lower.

According to the Associate Press.. "the Fed last month said it planned to purchase up to $600 billion in direct debt and mortgage-backed securities issued by big financial players including Fannie Mae and Freddie Mac in an effort to boost the availability of mortgage loans".

"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability," the Fed said.