In some cases, as we have just seen, individual countries, particularly the large industrial countries, will be able to provide liquidity to markets that are domestically based but global in their linkages. To a much larger extent than in the recent past, countries are also working to insure themselves through the accumulation of foreign currency reserves.
By putting downward pressure on interest rates, the Fed is trying to make financial conditions more accommodative – supporting asset values and lower borrowing costs for households and businesses and thus encouraging the spending that spurs job creation and a stronger recovery. Crucial to this process, as I just mentioned, is job creation.