The U.S. Federal Reserve auctioned $46.1 billion in safe Treasury securities to investment firms as part of an ongoing attempt to ease credit stresses. The auction, held Thursday, was the ninth of its kind. In what could be a sign of improving credit conditions, the auction drew bids less than the $75 billion being made available. In exchange for the 28-day loans of Treasury securities, bidding firms can put up as collateral more risky investments, including types of potentially shaky mortgage-backed securities and bonds backed by federally guaranteed student loans. The program began March 27. In Thursday's auction, investment firms paid an interest rate of 0.2500 percent for a slice of the securities. The Federal Reserve hopes that the program will encourage investment houses to lend to each other amid a credit crisis that has at time shaken the financial markets.
