This was a unique tool used in early 2008 that dislocated and strained the financial and credit markets and such changes in the funds rate quickly affected the price of assets and interest rates. Due to the illiquidity and dysfunction of spreads, the Fed was forced to start lending directly to counterparties against established collateral with the aim of obtaining liquidity and improving the flow of credit in financial markets and the economy ( Canuto et al, 2012). it increased the size of its balance sheet to be able to provide credit to businesses and families by reducing costs. The balance sheet adjustment was achieved through the Fed purchasing securities on open markets with the belief that in the event that interest rates fall to zero there will always be a solution in lowering long-term interest rates. They also lowered mortgage rates to reduce long-term borrowing by businesses and households to refinance or buy