Fed launches Operation Twist and more support to the mortgage market

FXstreet.com (Córdoba) – The Federal Reserve left as expected interest rate unchanged, in the range between 0.00% - 0.25% and announced Operation Twist and reinvestments in agency mortgage-backed securities.
According to the FED the economic growth remains slows and to boost activity announced that it will extend the average maturity of its holding of securities. “The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less.”
To support the mortgage market the Fed will reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities.
The decision was not unanimous as Richard W. Fisher, Narayana Kocherlakota and Charles I. Plosser voted against the action announced today, not supporting additional accommodation.