Treasury Will Help The Fed Execute "Operation Twist"

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Everyone is speculating that the Federal Reserve’s next move is “Operation Twist,” an effort to lower long-term interest rates by flattening the yield curve.  The Fed would accomplish this by buying long-term Treasury securities and selling short-term bills.

However, this effort could prove challenging without coordination with the Treasury Department.

The Financial Times now reports that this won’t be an issue:

The US Treasury would effectively accommodate a possible Federal Reserve stimulus to drive down long-term interest rates, according to people familiar with the matter.

The FT did not expand much further on what their sources said.

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