Investors showed signs of relief at the Federal Reserve's latest policy statement. The much anticipated FOMC statement revealed this afternoon that the economy was recovering after a “severe downturn." However, it's not a time for rejoicing since consumer spending will still remain restricted due to job losses and sluggish income growth.

Fed Chairman Ben Bernanke began his testimony before the Committee on the Budget in the US House of Representative acknowledging the economy has contracted sharply since last fall. Bernanke conceded that companies have shed close to 6 million jobs in this downturn, and the most recent information on the labor market suggests “sizable job losses and further increases in unemployment” are likely over the next few months.

Officials in Washington are looking to keep mortgage rates at affordable levels to help the ailing housing market. However, as Treasury notes being printed begin flooding the market, keeping rates down will be more of a challenge every week. As Treasury yields push higher there will be a tug on mortgage rates to follow suit.

According to reports this morning, the U.S. Federal Reserve is delivering what they promised. We are in a state of historical low mortgage rates and the subsequent refinancing activity that followed the rate decrease of the past six months is putting more money back into the economy through more usable income in the hands of home owners.

If you think that the rally in financials for the past few days has been a spectacle, and I do, it's nothing compared to the radical move in the bond market today. The Fed announcement said in a statement that it would buy $300 billion in Treasuries and purchase an additional $750 billion of mortgage-backed securities.

FOMC meeting resulted in Fed decision statement today which basicallly says that inflation is subdued, economy is slow, but will gradually pick up.

Policy makers at the U.S. central bank are meeting Wednesday to discuss steps they hope will boost the struggling U.S. economy, but they are expected to make no change to already low interest rates.

The U.S. central bank is meeting Tuesday to consider new ways to battle the worst economic crisis facing the nation since the 1930s.

The government also is releasing a report Tuesday on the U.S. housing market, which is at the heart of the global economic crisis.

How far will the Fed go? It looks like the Fed is going to take whatever it takes to rescue the U.S. Financial System. Today's report shows that the Fed is prepared to lend $7.4 trillion on behalf of U.S. taxpayers to rescue the troubled financial system that started last year.

U.S Fed chairman Ben Bernanke and the Fed have to be miffed over their lack of traction in addressing the credit bubble.

The Fed has released a statement announcing significant efforts to boost liquidity in the credit markets. The Fed will begin to pay interest on required reserve balances and excess reserve balances. Additionally, the Fed will increase the amount outstanding in the Term Auction Facility (TAF) to a potential amount of $900 billion over year end.

The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies.