The Fed’s New “Operation Twist” Creates a Spike in Treasury Prices – Market Update

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The Fed’s strategy to sell short-term and purchase long-term debt – both worth a staggering $400 billion – severely escalated treasury prices yesterday and this morning.  This debt diffusion plan, entitled “Operation Twist,” will initiate a decrease in pressure on long-term interest rates to improve financial conditions for borrowers.  Analysts believe the revelation of the project additionally insinuates that the Fed finds the current economic condition to be squalor, which will ultimately steer brokers toward safer investments.