WASHINGTON (AP) -- The Federal Reserve says it will buy commercial paper -- a crucial short-term funding mechanism that many companies rely on for day-to-day operations -- from money market mutual funds.
It's the latest effort by the central bank to break through a credit clog that has hobbled lending and threatens to plunge country into a deep and painful recession.
The Fed is tapping its Depression-era emergency powers and creating a new facility to buy a vast array of commercial paper from the funds.
Money market mutual funds have been under pressure as skittish investors demand withdrawals.
Many companies rely on commercial paper to pay workers and buy supplies.