Fed officials signaled heightened worries over the economy, extending a program shifting their holdings toward longer-term securities through the end of the year and said they were "prepared to take further action" if needed.
WASHINGTON — The Federal Reserve is extending a program intended to further lower long-term interest rates, noting hiring has weakened, consumer spending is rising more slowly and the economy needs more support. The Fed will continue Operation Twist through the end of the year.
By Investment U:
By Jason Jenkins
On Wednesday, the Federal Reserve announced it would proceed with a new $400-billion program that will tilt its $2.85-trillion balance sheet more to longer-term securities by selling shorter-term notes and using those funds to purchase longer-dated Treasuries. It’s rationale?
When even the Fed's personal trusted scribe, the WSJ's Jon Hilsenrath, who at least on one occasion saw substantial editorial influence by the NYFed on his upcoming article (dealing with his "prize winning" investigation into Stephen Friedman), accuses the Fed of failing to communicate, one can imagine just how badly the streams of telegraphing futures step by the Marriner Eccles central planners must have gotten crossed.
By Doug Short: The Fed's latest strategy for managing the economy, Operation Twist, has two months to go. The program was announced on September 21st of last year with the stated purpose of selling $400 billion in shorter-term Treasury securities by the end of June 2012 and using the proceeds to buy longer-term Treasury securities.
By Doug Short: The Fed's latest strategy for managing the economy, Operation Twist, has about 10 weeks to go. The program was announced on September 21st of last year with the stated purpose of selling $400 billion in shorter-term Treasury securities by the end of June 2012 and using the proceeds to buy longer-term Treasury securities.
By Josh Cohen:
Despite the predictions of two major investment banks about which I wrote yesterday, the FED opted not to launch QE3 today. While the FED did not announce QE3, it did elect the extend Operation Twist through the end of this year. I believe, however, that the extension of Twist will not be of much help to the real economy.
The Federal Reserve announced on Wednesday (,
) that it will sell some of its shorter-term assets in order to buy more longer-term assets. Here I assess some of the possible consequences of this move.