U.S. Fed Extends 'Operation Twist' to Boost Economy
In a bid to boost its flattering economic recovery, the U.S. Federal Reserve has decided to extend the stimulus program known as "Operation Twist" through the end of this year.
Citing the European financial crisis and sagging U.S. economy the Fed announced Wednesday that it would extend the program by buying 267 billion U.S. dollars in longer-dated securities by the end of 2012.
Operation Twist shifts the Fed's holdings toward longer-term securities by selling bonds with maturities of three years or less and buying securities with maturities of six years and longer to lower long-term interest rates and boost growth if the U.S. economy worsens.
The first Twist program was set to end this month.
The Fed also decided to hold the key short-term interest rate at near zero until at least the latter part of 2014 a policy it has been sticking to since December 2008.
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