News
WSJ | Fed Launches New Stimulus
Dramatic Recasting of Securities Holdings Aims to Reduce Long-Term Rates.
CNN: Money | Federal Reserve launches Operation Twist
While the move does not mean the Fed will pump additional money into the economy, it is designed to lower yields on long-term bonds, while keeping short-term rates little changed.
WSJ | Fed Twist Prompts Markets to Turn
The Federal Reserve pulled fresh levers in the bond markets but failed to dispel investors' skepticism about its ability to kick-start the economy.
Blogs
Daily Capitalist | Operation Twist: The Consequences
So today, the Fed gave us, in addition to their normal pap about “downside risks” and “exceptionally low rates” forever, two new policies: (1) they will sell $400B worth of Treasurys of 3 years or shorter maturity, and buy $400B worth of Treasurys with 6 to 30 year maturity; and (2) the Fed will reinvest the proceeds when mortgages it owns are paid.
WSJ: Real Time Economcis | Parsing the Fed: How the Statement Changed
Reviewing changes in the Fed's statement between September and August.
Minyanville | 11 Aftereffects of Operation Twist
The Fed thinks Operation Twist will spur more borrowing and lending. This might happen, but there will be other consequences, too.
Cato @ Libert | The Federal Reserve, the ‘Twist,’ Inflation, QE3, and Pushing on a String
I’ve freely admitted before that it is difficult to identify the right monetary policy, but it certainly seems like this policy is — at best — an ineffective gesture. This is why the Fed’s various efforts to goose the economy with easy money have been described as “pushing on a string.”
