The Federal Reserve kept interest rates unchanged but said it will buy $300 billion in long-term Treasury bonds. The Fed also plans to buy mortgage-backed securities and the agency debt of Fannie Mae and Freddie Mac.
The move aims to boost bond prices, thus forcing the yield on long-term interest rates down. The ultimate hope is to revive lending and bolster the housing market. The chart below shows a spike in 30-year Treasury bond prices immediately following the announcement.