The Federal Reserve will expand its program to replace short-term bonds with longer-term debt by $267 billion through the end of the year in a bid to reduce unemployment and protect the expansion.
The continuation of Operation Twist "should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative," the Federal Open Market Committee said today in a statement at the conclusion of a two-day meeting in Washington. Stocks and Treasury yields dropped after the statement.
"Growth in employment has slowed in recent months, and the unemployment rate remains elevated," the FOMC said. "Household spending appears to be rising at a somewhat slower pace than earlier in the year."
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