Fed launches $400bn ‘Operation Twist’

Fed launches $400bn ‘Operation Twist’ The US Federal Reserve launched “Operation Twist” on Wednesday in a bold attempt to drive down long-term interest rates and reinvigorate the faltering economy.

The central bank said that it would buy $400bn of Treasuries with remaining maturities of six to 30 years and finance that by selling an equal amount of Treasuries with three years or less to run.

“This programme should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” said the Fed. The policy is named after a similar attempt to “twist” the shape of the yield curve in the early 1960s.
http://link.ft.com/r/TWK799/HYS9TK/RNF1Y5/VL1UMI/16VGBP/VU/h?a1=2011&a2=9&a3=21