Fed Reserve Commits an Additional $267B to ‘Operation Twist’
- Posted on June 20, 2012 at 1:10pm by
Becket Adams
- Print »
- Email »
WASHINGTON (The Blaze/AP) — The Federal Reserve announced Wednesday that it would commit an addition $267 billion to “Operation Twist,” a program intended to drive down long-term interest rates. The Fed cited weak hiring and lousy consumer spending as reasons for committing this additional “support” to the economy.
But what is “Operation Twist”? As reported earlier on The Blaze:
The plan … resembles a program the Fed used in the early 1960s to “twist” long-term rates lower relative to short-term rates.
[…]
Under its plan, the Fed will extend the average maturity of its holdings from six to eight years. The Fed has directed the New York Fed to buy Treasurys with remaining maturities of six to 30 years, and to sell an equal amount of securities with maturities of three years or less.
The Fed announced that it will continue the program through the end of the year, adding that it might help spur more borrowing, spending, and growth.
But extending “Operation Twist” might not provide much benefit. Long-term U.S. rates have already touched record lows. Businesses and consumers who aren’t borrowing now might not do so if rates slipped slightly more.
Fed officials are also reiterating their plan to keep short-term rates at record lows until at least late 2014. They also repeated a warning that Europe’s financial crisis continued to pose a significant risks to the economy.
The Fed has more leeway to act because it says inflation has declined. It pointed to lower gas and oil prices.
The statement was approved on an 11-1 vote. Jeffery Lacker, president of the Richmond Regional Fed Bank, dissented for the fourth straight meeting. The statement said he opposed the continuation of “Operation Twist.”
The U.S. economy looks weaker than it did when the Fed last met in April. Growth was more sluggish in the first three months of the year than first estimated. Job growth averaged only 73,000 in April and May, after average gains of 226,000 per month in the first three months of the year.
When the “twist” was first introduced, Michael Feroli, chief U.S. economist for JPMorgan Chase, had this to day: “It’s better than nothing but it’s obviously not going to be a knockout blow or a game changer for the economy.”
Based on the Fed’s reasoning (i.e. weak spending and high unemployment) for committing addition billions to a program it introduced back in September 2011, it doesn’t look like Feroli was too far off the mark.
The Associated Press contributed to this report.
Popular Stories
Does Misstated Marathon Claim Prove Paul Ryan Is Dishonest? (POLL) 688 Comments
‘Jumah at the DNC’ Speaker: ‘Muslims Visited America Prior to Columbus’ & ‘It Was a Muslim’ Who Guided Him to the ‘New World’ 537 Comments
Paper Details Obama Admin’s Alleged Secret Note Sent to Iran: If Israel Attacks, We Won’t Get Involved 466 Comments
Obama: RNC Like Watching ‘Black-and-White TV’ Because Romney ‘Did Not Offer a Single New Idea’ 374 Comments
Roseanne Barr: Most Billionaires ‘Violent Pedophiles’ & ‘Heartless’ Cocaine Addicts 334 Comments
Faith
This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 308 Comments- Pakistani Muslim Cleric Accused of Framing Disabled Christian Girl in Koran-Burning Case Read More
- ‘Made Up Religion’: TV Historian Enrages Muslims, Receives Threats After Producing UK Documentary Questioning Islam’s Beginnings 316 Comments
Meet the Controversial German Imam Accused of Brutally Beating His Wife & Pushing Sharia Law Read More
‘Self-Proclaimed Messiah’ & Unification Church Leader the Rev. Sun Myung Moon Has Died — Here’s His Life Story Read More
Business
President Obama Issues Major ‘Green Energy’ Executive Order 216 Comments- Germany’s Upcoming Court Ruling Will be Huge for the EU Read More
Ford Looks to Beat Toyota for Best-Selling Car in 2012 With This Model 148 Comments
Bernanke & QE3: Here’s What You Need to Know Read More- ‘Extortion’: Why Did the Labor Department ‘Drop the Hammer’ on Oregon Farmers? 301 Comments
Technology
- This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 308 Comments
‘TaserDrone’: Hackers Weaponize Quadcopter With Actual ‘Shocking’ Technology Read More
Ever Heard of the Wild ‘Burning Man’ Festival in the Middle of the Nev. Desert? Here’s Your Primer Read More
Stanford Develops Technology ‘Better Than Steroids’ for Athlete Recovery Read More
Have You Pretended to Know What ‘the Cloud’ Is? You’re Not Alone Read More
Submitting your tip... please wait!
Comments (54)
Truth1776
Posted on June 20, 2012 at 4:28pmThey want us to spend more money? Then quit taking it away and giving it to crony favorites!
Here’s a suggestion: divide the $276B by the number of LEGAL citizens that DO NOT work directly for any federal/state/local government – and send it to us! We can spend/save it much more wisely than any government moron!
Spending money has not helped our country (only the favored few) so let’s just spend more – maybe that will help. In the immortal words of Bugs Bunny: “What a bunch of maroons!”
Report Post »georgepatton
Posted on June 20, 2012 at 4:23pmBenny you need beat repeatedly with a sack full of door knobs,you sack of excrement!
Report Post »bumfuzeled
Posted on June 20, 2012 at 4:10pmAll of the presidents that tried to pull America away from a central bank were assassinated by the 13 families. Don’t wish that on anyone
Report Post »v15
Posted on June 21, 2012 at 3:18am13 families?
Report Post »ChiefGeorge
Posted on June 20, 2012 at 4:05pm“The Fed announced that it will continue the program through the end of the year, adding that it might help spur more borrowing, spending, and growth”.
Say what????
Spending our money will get us to spend more of our own? I see the twist now!
Report Post »Mr Sanders
Posted on June 20, 2012 at 3:57pmBenny – Student of the Great Depression…. yeah…. the continuation thereof
More like – Follower/Groupee of Weimar
Report Post »Mr Sanders
Posted on June 20, 2012 at 3:53pmWonder what you can buy with $276B… hmm
- 7/8 the way to a new aircraft carrier
- 69B cups of Starbucks Mocca’s
- 69.4B Loaves of bread
- 5.52M Service per Flight hours for the F-22
- 500 containers full of various ammo for the Military
- Pay raises for ALL Military Service Personel for 7-10 years at least
-Save 5 States from financial ruin based on the FERC Report – you pick which to save Benny
- 138,000 miles of non-elevated highway
- 276 Clean Coal Fired Power Plants [ ave. 350Mw ]
- 50.181B Big Mac Meals (wow!)
- 552M IPad’s V3.0 (What!? One for every American with cash left over?! Start “Bonds for IPads” )
- 778,571 Homes paid off, debt forgiven (Hmm? So we’re sending $276B to save someone else’s house(s)… but not our own? Curious???? )
- 276B Protein Bars
Look at all the goodies we could buy, payoff, reward military personel for service, clean power plant replacements and basic food stuffs for this operation; insane amounts! Now, I’m not saying that Big-G pay off our homes – that’s our responsibility. Just a real hard look/ reality check of what Fed OpTwst can buy……
Finally, what does $276B buy = LESS THAN one month of the US Gov’t Spending Habit/Addiction.
Report Post »Mutiny
Posted on June 20, 2012 at 5:27pmVery good report. What is so sad is the GOP have rallied behind Romney who has a budget that doesnt cut current spending and Paul Ryan’s budget who only cuts 5 trillion over the next 10 years and doesnt balance the budget for 30 years.
We had our chance to take an aggressive turn in direction and fix our nation. The GOP establishment, Fox news, and talk radio made fun of the one candidate saying “we have a spending problem”.
Report Post »KidCharlemagne
Posted on June 20, 2012 at 3:17pmDoesn‘t anybody ever wonder how it’s possible to create trillions of new dollars while running enormous budget and trade deficits simultaneously, but still not experience SEVERE inflation too??…..
It couldn‘t be done in the 1970’s either:
———————————————————–
“Nixon and Safire put together a speech to be televised Sunday night. It had taken only a few hours during that August 1971 weekend for Nixon to decide to sever the nation’s last tenuous link to the historic American gold standard, a monetary standard that had been the constitutional bedrock (Article I, Sections 8 and 10) of the American dollar and of America’s economic prosperity for much of the previous two centuries.
At least one Camp David participant, Paul Volcker, regretted what transpired that weekend. The “Nixon Shock” was followed by a decade of one of the worst inflations of American history and the most stagnant economy since the Great Depression. The price of gold rose to $800 from $35.”
WSJ.com: “The Nixon Shock Heard Around The World”
U.S. budget and trade deficits today are far, far, far more severe in the present moment than they were during the 1970′s, but yet we don‘t have the nasty inflation today that we saw during the 70’s….
How is this possible??
Report Post »bumfuzeled
Posted on June 20, 2012 at 4:07pmWe have inflation if you count the weakened dollar, higher prices from oil, groceries and housing to health insurance premiums (up 40% in 2 1/2 years, thanks Obamacare) So we have hidden inflation. The real hyper-inflation is just around the corner. I remember the 18% interest rates of the late 70′s and enjoyed them because I had money in T bills but like so many others my net worth has not kept up with inflation. 18% interest today would spark worldwide pandemonium.
Report Post »AUsername
Posted on June 20, 2012 at 3:16pmhow about no interest rate its our money you greedy vermin, we should atleast get it close to what the banks get it for. of course the vermin want to give money to their fellow vermin instead of the people of this country. if the economy collapses the rich and the bankers get dragged out of their homes and get shot or dragged off to camps if a new regime paints them as scapegoat, that is history and it sucks.
Report Post »nobull14
Posted on June 20, 2012 at 3:13pmThe federal reserve board should be audited and brought up on charges for treason !!!!!!!
Report Post »hatchetjob
Posted on June 20, 2012 at 3:03pmOperation Sick and Twisted.
Report Post »affinity
Posted on June 20, 2012 at 2:50pmThe federal reserve is buying more debt, to give banks more deposits, to create more fiat money, to loan more fake dollars to each other. Money is not being invested into the real economy for a reason. Be prepared.
Report Post »ProbIemSoIver
Posted on June 20, 2012 at 2:42pm“Operation Twist”? lol.
I call it “QE3v1”, “Printing FIAT Monopoly Money”, “Another Loan with interest from the PRIVATE BANK”, “Tarp – part deux”, “Job Stimulus Package Addendum”, “More exchanging of U.S.Treasury bonds (American Assets) for worthless paper, with interest”.
How about “Operation seize America and Americans by Bankruptcy”?:
Report Post »http://www.youtube.com/watch?v=IlCs7u1ihws
Iamnotanumber
Posted on June 20, 2012 at 2:22pmDoes it alarm anyone else that the Federal Reserve is naming there “banking” schemes-”Operations.” I personally find it mildly disturbing that a financial institution is referring to their work in these terms, it implies an adversary. Whom or what would that adversary be? What measures will they employ to be successful? Just sayin.
Report Post »Truthbeliever2
Posted on June 20, 2012 at 2:16pmHELL YEA!!! Print that money America. Just keep on printing. I can’t wait till Romney is the president so I can watch him and his administration bleed this country dry.
Communist U.S.A.
Report Post »SmarterThanTheAverageBear
Posted on June 20, 2012 at 2:05pmThis is nothing but further quantitative easing. It will continue on through infinity. They can’t stop it now. The only next logical step is the implosion of the whole economy. Be prepared.
Report Post »Living In NYC
Posted on June 20, 2012 at 1:45pmBen keep the presses rolling…up, up, up, up goes energy and food prices! Oh yeah..food and energy aren’t in the inflation index! Only my home which has gone down in value 30% in 3.5 years…so we have no inflation!
Sorry Ben and Barry…double major business / econ major at Georgetown..but it doesn’t take two degrees to know I have to pay 100% more for energy and 40% more for food since 2009! Only takes me a dollar calulator from Walgreen’s to figure it out!
Report Post »fidel1234
Posted on June 20, 2012 at 3:17pmYour right except they don’t have to roll the presses they just punch numbers in a computer with nothing backing them,our system of money is a joke at best.
Report Post »4xeverything
Posted on June 20, 2012 at 1:31pmLower gas prices!?! I live in Cincinnati. Now, according to Mark Twain he wanted to be in Cincinnati at the end of the world because Cincinnati is always 20 years behind the times. So, my question is…how low are everyone else’s gas prices? Here we’re paying $3.70/gallon (give or take a dime). Again, lower gas prices!?! Where?
Report Post »Gonzo
Posted on June 20, 2012 at 1:37pmIt goes to $4 a gallon, lower it to $3.60 and we’re supposed to be jubilant?
Report Post »D-Fence
Posted on June 20, 2012 at 1:40pmI paid $3.19 this morning in Tampa, Florida.
Report Post »Stunner
Posted on June 20, 2012 at 1:48pm$3.12 here in Wichita Falls, TX. What-a-deal!
Report Post »Gonzo
Posted on June 20, 2012 at 1:49pm…and that makes you happy?
Report Post »Living In NYC
Posted on June 20, 2012 at 1:49pmLast time when I traveled through Cincy week a week ago…I paid way over $4.00 a gallon for premium….sorry Barry my car has a Corvette V-8 in it and no Volt or electric Focus are in my future!
So Ben and Barry better quit printing greenbacks…cause gas will be $10.00 a gallon!
Report Post »Mutiny
Posted on June 20, 2012 at 1:57pmWe had our chance at a guy that would end this crap and you people rejected him. Every one but the Ron Paul supporters deserve this crap.
Report Post »Truthbeliever2
Posted on June 20, 2012 at 2:39pmYou Jack Ass’s should have been backing Ron Paul all this time.
He is the only man who will go after the FED.
Anyhoo ya’ll have a good time with progressive douche bag Mitt Romney.
Report Post »Gonzo
Posted on June 20, 2012 at 3:49pmYea, yea, yea…we should have backed Ron Paul so Obama could get another four years. Got it.
Report Post »Mr Sanders
Posted on June 20, 2012 at 5:22pm$3.76… finally…. down from $4.19…. that’s still not a deal by any stretch of the imagination.
Report Post »Mutiny
Posted on June 20, 2012 at 5:32pm@gonzo
Had the establishment, Fox news, and talk radio been honest and not written off Dr. Paul things would be different. They did prove the theory by ignoring, cheating, and lying about him that both sides, the left and the right are working for the same goal.
US bankruptcy is right about the corner.
Report Post »3monkeysmomma
Posted on June 20, 2012 at 6:03pm@ Gonzo
Throughout this past year Ron Paul polled as well and in some case BETTER than Romney against Obama. He ALWAYS polled better than Bachman, Gingrich and Santorum.
Paul would have pulled in the Libertarians and a lot of independants who will now either stay home or vote third party….so yeah, you should have supported him.
Report Post »lylejk
Posted on June 20, 2012 at 7:47pmSneaky Pete’s (Citgo gas) had it at $2.99 yesterday; cheapest that I’ve seen it since Christmas (it actually got to $3.72/ga a few months ago). Freaking rediculous that gas is above $1.5/ga imo. Only aroun 13 years ago, it was 68¢/ga where I lived near Houston,TX at that time. We all remembered what happened the Summer prior to BO’s election (over $4.25/ga as I recall; freaking ridiculous). Why do we allow our government continued rule by idiots is beyond me. Until gasoline goes below $2/ga, the economy won’t really grow. Even if they do lower the cost of gas, the price for goods or service will never go back down after they raised them, so I won’t expect the price of a Whopper to ever be a buck again which is sad for me. lol
:)
Report Post »jackact
Posted on June 20, 2012 at 1:31pmAmerica, repeal the 16th amendment and shut this unconstitutional catastrophe down!
Report Post »Before it is too late.
Freddie and Fannie would collapse in the aftermath.
Taxpayers would save billions and people on ‘beer budgets’ would be forced to remain on them.
justangry
Posted on June 20, 2012 at 1:29pm“The Fed announced that it will continue “Operation Twist” through the end of the year, adding that it wants to spur more borrowing, spending, and growth.”
Please someone tell me how increased borrowing is a good thing for the country as a whole and not just the bankers collecting interest.
Report Post »fidel1234
Posted on June 20, 2012 at 3:19pmTell the liberals,they are the ones who believe keep bailing out the boat when it’s got a leak instead of fixing the leak.
Report Post »lylejk
Posted on June 20, 2012 at 1:26pmBernake’s and incompetant poser and should get the boot. His policies are hurting the elderly by devalueing their savings. The cost of goods and services have also gone up despite the slightly lower gasoline prices (still well over $1 higher since BO took the reins). The only reason the dollar‘s as strong as it is is because the EU’s about to crash. This whole planet is about to go to pot since they replaced the gold standard with fiat and now people are waking up to the fact that money is just ink on paper (or bits) and can be conjured up at will by the FED making it all but worthless. :)
Report Post »lukerw
Posted on June 20, 2012 at 1:25pmIn Ancient Egyptian texts… the worst Punishment was… Death by a Thousand Cuts. Ben must really Hate us!
Report Post »CatB
Posted on June 20, 2012 at 1:20pmShoud be called “Operations SCR*W” .. as in the taxpayer and their children, grandchildren, great-grandchildren …..
Report Post »KMM
Posted on June 20, 2012 at 1:28pm… great grandchildren’s great-grand-children… *sigh*
Report Post »Mutiny
Posted on June 20, 2012 at 1:19pmThank goodness we have a nominee in Romney who will stand up to the FED and get rid of Bernanke.
http://www.youtube.com/watch?v=x2t0LjX1gBA Romney on Bernanke “ I think he is doing a good job”
http://www.youtube.com/watch?v=5FtzSmlkncM&feature=relmfu Romney on the FED “ I am not going to take my effort and focus it on the FED”
Report Post »LostInTheSpin
Posted on June 20, 2012 at 2:03pmExactly…people think we are going to be on the upswing if Romney he get’s elected, because “at least he’s not Obama.”
Report Post »Snowleopard {gallery of cat folks}
Posted on June 20, 2012 at 1:18pmI have warned that Obama is preparing a scorched earth move on the economy, and now that he is seeing defeat as a true possibility, he is having it enacted. His plan is simple – do as much damage as possible, preferably irreparable amounts, and the entire structure comes down around his ears. He will rule and control all or destroy all, there is no inbetween with Obama.
Report Post »Gonzo
Posted on June 20, 2012 at 1:16pmInterest rates, yea there’s the problem, interest rates. They are at record lows already, but we’re going to throw more money at them. Things should get better pretty quick now!
Report Post »