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Bad Mortgage News Roils Markets

There is turmoil in the financial markets. The Dow Jones fell nearly 400 points on Thursday and that is having an impact on financial markets across the globe.

The markets are reacting to a crisis in the U.S. mortgage market. There are fears that homeowners defaulting on subprime loans will cause a ripple effect throughout the world economy.

On Friday, the Fed injected some $35 billion into U.S. financial markets. They say they will pump as much cash as is necessary to keep money flowing through the economy, in an effort to avert bankruptcies and new debts throughout the economy.

All of this has been triggered by the subprime loan problem, and lots of financial institutions all over the world are feeling the impact.

Copyright 2023 NPR. To see more, visit https://www.npr.org.

Adam Davidson is a contributor to Planet Money, a co-production of NPR and This American Life. He also writes the weekly "It's the Economy" column for the New York Times Magazine.
Madeleine Brand
Madeleine Brand is the host of NPR’s newest and fastest-growing daily show, Day to Day. She conducts interviews with newsmakers (Iraqi politicians, US senators), entertainment figures (Bernardo Bertolluci, Phillip Seymour Hoffman, Ricky Gervais), and the everyday people affected by the news (an autoworker laid off at GM, a mother whose son was killed in Iraq).