The Federal Reserve has auctioned $24.12 billion in super-safe Treasury securities to big investment firms as part of an ongoing effort to ease credit problems.
The auction -- the sixth of its kind -- was held Thursday and fetched bids slightly less than the $25 billion being made available.
That small reduction could suggest that demand for Treasuries may be moderating a bit. That might be viewed as a sign of some improvement in credit conditions.
In exchange for the 28-day loan of Treasury securities, bidding firms can put up more risky investments, including certain shunned mortgage-backed securities, as collateral.
In Thursday's auction, investment firms paid an interest rate of 0.1% for a slice of the securities.
The auction program is intended to help financial institutions and the troubled mortgage market. The goal is to make investment houses more inclined to lend to each other. It also is aimed at providing relief to the distressed market for mortgage-linked securities.