Operation Twist begins: Fed to sell $400 billion of short-term debt, buy $400 billion of long-term debt; Dow off 220

Joe Weisenthal
Business Insider
9/21/2011

The eagerly awaited Fed announcement is out.

As the economy has been weakening, everyone was wondering whether Bernanke & Co. would juice the economy with more stimulus.

Well we didn’t get another round of quantitative easing, what we got instead is what people have referred to as “Operation Twist.”

As a way of reducing yields further, the Fed is selling bonds at the short-end of its portfolio, and buying bonds at the long end of the portfolio.

Specifically, it’s doing a $400 billion swap.

Markets are drifting a bit lower right now.

The article continues, with graphic, at Business Insider.

Operation Twist Will Really Hurt

Comments are closed.