In This Issue:
- The Fed Tries a Twist
- Chilly Reception for Disclosure Bill
- Obama's Jobs Bill Prompts Disclosure for New Issues
- Bond Market Snapshot
The Fed Tries a Twist
The Federal Reserve recently initiated a "sell short, buy
long" bond strategy in an effort to stimulate the current
stagnant economy. Under this strategy, dubbed "Operation
Twist," the Fed will sell $400 billion of maturing
short-term bonds (6-month to 2-year maturities) and use the
proceeds to buy long-term bonds (5-, 10-, 30-year maturities).
President Kennedy tried a similar strategy in 1961, partly to
discourage investors from selling dollars for gold and then selling
the gold in Europe for a profit, and partly to provide stimulus by
keeping long-term rates lower. The program was originally thought
to be a failure, but some economists think that it was effective
after isolating certain statistics.
