You wouldn't know the Federal Reserve has done nothing but add to its record monetary stimulus from looking at short-term funding markets.

The federal funds effective rate on overnight loans between banks was 0.16 percent on Nov. 21, up from 0.06 percent at the end of September 2011, the month Fed officials announced they would begin swapping short-term securities in their portfolio for long-term debt under Operation Twist. The rate for borrowing and lending Treasuries for one day through repurchase agreements also has surged.

Higher overnight interest costs are a side effect of Operation Twist that has persisted despite new accommodation, including a third round of quantitative easing and extending the horizon for near-zero borrowing costs through mid-2015. When the program ends in December, the Fed will have shrunk its portfolio of short-term securities by $667 billion through Twist sales and redemptions, designed to lower long-term interest rates while keeping the size of the Fed's balance sheet constant.

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