Financial markets gave an initial vote of confidence to the US Treasury's in effect nationalisation of Fannie Mae and Freddie Mac yesterday, but investors grew more cautious later and share prices surrendered some of their early gains.
The plan announced on Sunday by Hank Paulson, Treasury secretary, received broad support from congressional leaders, but it remains unclear how much it would change the outlook for the US housing market and the economy.
Chris Dodd, chairman of the Senate banking committee, said there were still “many unanswered questions” about the plan.
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