The Treasury Department has decided to move a significant amount of funds from the Federal Reserve to other locations throughout the duration of the financial crisis. This move allows the Federal Reserve to freely loan funds to the market without having to impact the federal funds rate, which has important significance to banks and other lenders.
 
Right now, Treasury holds $200 billion in a Supplementary Financing Account with the Fed, but it plans to cut that amount to $15 billion over time. Analysts think that this move comes as part of the Treasury’s attempt to avoid hitting the federal debt ceiling, …read more

The Bush administration has admitted that the national budget deficit is edging towards $490 billion. The current record is only $413 billion, from 2004.
Of course, that $490 billion isn’t precisely accurate. There are about $80 billion in the U.S.’s military spending that didn’t make it into that estimate, due to the way the budget deficit is calculated.
The estimate hasn’t been officially released yet… an anonymous official slipped a few news agencies a head’s up before a press conference later today. White House press secretary Dana Perino is refusing to comment, although she did point reporters towards the fact that …read more