New Zealand exporters will be the first to benefit from the latest massive life-line thrown to United States consumers by the Federal Reserve.
The Fed said yesterday it would buy up $US100 billion ($NZ188 billion) of debt issued to government-sponsored mortgage enterprises Fannie Mae, Freddie Mac and the Federal Home Loan banks.
It would also purchase up to $US500 billion of mortgage securities backed by Fannie Mae, Freddie Mac and Ginnie Mae.
The central bank also teamed with the Treasury Department to launch a $US200 billion facility to support consumer finance - including car and credit card loans and loans backed by the federal small business administration.
Bank of New Zealand markets economist Mark Walton said from Wellington the US Government had moved from propping up financial markets to direct stimulus of the economy.
Banks were finding it easier to deal with each other and that would hopefully stimulate demand from consumers as credit worries eased.
Economies such as New Zealand, Australia, China and Japan that exported into the US would start to find improved markets as the cash filtered through the economy.
"These types of actions will eventually see demand improve and support commodity prices. The US is a key market for some of our exporters, particularly those dealing in beef, casein and logs.
"The US is important to us, as is Australia, and although we go on a lot about the Asian markets, they are quite close to us. Any benefit to those markets will help us."
Fonterra was pulling out of its Chinese San Lu investment, but that was more of a change of strategy than a complete abandonment of its Asian involvement, Mr Walton said.
Exporters were at the "pointy end" of the global economic downturn.
Prices had come off and the demand for some New Zealand exports was looking feeble.
Reuters reported that the emergency measures employed in the US were the latest in a series of steps officials had taken to try to prevent the economy falling into a deep, long recession.
Most economist say the actions represent a necessary, if ad hoc, response to the greatest financial shock the US has experienced since the Great Depression.
Some are worried the mounting costs of the measures, which have the potential to reach several trillion dollars, could eventually fuel a troubling inflation.
However, policy makers have signalled a willingness to do whatever it takes to ease the risk of a severe recession.
The Dow and Standard and Poor's 500 rose on optimism that the Fed's latest rescue package could revive the sagging housing market and free up consumer lending.
The Dow had its first positive three-day run since late August, while the S&P rose three straight sessions for the first time since mid-September.
But the Nasdaq slid as technology stocks fell on more immediate concerns that demand may be weakening after bellwether Cisco Systems said it would close most of its operations in the United States and Canada for five days in an effort to cut costs.
