Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Operation Twist and the effect of large-scale asset purchases
The Federal Reserve's current large-scale asset purchase program, dubbed "QE2," has a precedent in a 1961 initiative by the Kennedy Administration and the Federal Reserve known as "Operation Twist." An analysis finds that four of six potentially market-moving Operation Twist announcements had statistically significant effects and that the program cumulatively caused a significant but moderate 0.15 percentage point reduction in longer-term Treasury yields. These results can be used to estimate QE2's effects.
Cite this item
Titan Alon & Eric T. Swanson, "Operation Twist and the effect of large-scale asset purchases"
, Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 13, 2011.
Keywords: Monetary policy ; Interest rates
This item with handle RePEc:fip:fedfel:y:2011:i:apr25:n:2011-13
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