The Fed put its (fiat) money where its mouth is by announcing a host of programs. It cut its target interest rate by 1% to zero and re-instituted quantitative easing, pledging to purchase $700 billion worth of Treasury securities and agency mortgage-backed securities over the coming months. This is in addition to $1.5 trillion of temporary overnight and term repurchase operations it announced two days ago. Separately, the Fed issued a coordinated announcement with a number of other central banks, including the Bank of England, Bank of Japan, and the ECB that the interest rate on dollar swap arrangements would be cut by 0.25% and 84-day maturity swap lines would be added to the current 7-day dollar swap lines. In yet another announcement , the Fed slashed the rate at its discount window by 1.5% to 0.25% and its reserve requirements for all banks and other depository institutions to 0%.

In the wake of these announcements, some commentators questioned whether the Fed has run out of "tools" to deal with the impending recession and recovery. Former Fed vice chair Donald Kohn was ambivalent, writing "They are not out of tools, but they've used the biggest tool they have, the interest rate tool, the one that's been proven over the years to work the most effectively." Michael O'Rourke, chief market strategist at JonesTrading took a dimmer view of the Fed's predicament, declaring :