(CNSNews.com) – The Federal Reserve announced today that it would continue the policy known as Operation Twsit, extending it through the end of the year.
Following its latest quarterly meeting, the Federal Open Market Committee (FOMC) – the Fed’s decision-making body – announced that it would continue buying medium- and long-term government bonds and selling its holding of short-term debt through the end of 2012. The program, known as Operation Twist, was set to expire this month.
“The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities. Specifically, the Committee intends to purchase Treasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less,” the Fed said in a press release on Wednesday.
The move is designed, the Fed said, to put downward pressure on long-term interest rates as the government continues to run annual deficits of around $1 trillion.
The Fed also announced that it would continue its policy of extremely loose money, declining to raise short-term interest rates above their current level of between zero and 0.25 percent. The Fed said these historically low interest rates would continue until at least 2014.
The FOMC also noted that, "Growth in employment has slowed in recent months and the unemployment rate remains elevated. Housing spending appears to be rising at a somewhat slower pace than earlier in the year."