Federal Reserve 'Twists' again for extra six months
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Thursday 21 June 2012
The US Federal Reserve will continue "Operation Twist", its intervention in the credit markets, to push down long-term interest rates for an extra six months.
The central bank cited slowing job growth in the world's largest economy to justify continuing purchases of long-term, US government debt.
The decision stopped short of some traders' hopes that the Fed might pump new money into the economy; instead the central bank will simply reinvest proceeds from previous, short-term bond purchases.
It is the rates on long-term, government debt that most affects the real economy, since this affects mortgage rates and the interest rate on business loans.
Operation Twist had been due to expire at the end of this month.
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