* The American Central Bank launched the 400 billion dollars "Operation Twist"
This week, the officials of the US central bank (Federal Reserve - Fed) have announced that they would do more to prevent the American economy from entering recession, while at the same time announcing "Operation Twist", by which they are planning to lower long term interest rates and to support the real estate sector. The measure uses the name of a similar program of 1961.
The new plan of the Fed amounts to 400 billion dollars, and involves the sale of short term Treasuries, using the proceeds to acquire long term treasuries.
The management of the Fed believes that shifting the allocation ratios of long term and short term treasuries could encourage the refinancing of mortgages and spur the interest of investors in riskier assets. The Central Bank has also announced a measure intended to support the mortgage market, by reinvesting residential debt coming to maturity into securities based on mortgages, instead of Treasuries.
"There are significant risks for the economy, including the tensions on the global financial markets", the officials of the Fed said, who added that they have discussed several monetary policy instruments that would help the recovery of the economy.
According to the Fed, inflation seems to have slowed down since the beginning of the current year.
It bears reminding that in August, the Fed announced it would keep its interest rate in the 0-0.25% band until mid-2013. In December 2008, the Fed cut the interest rate, taking it close to zero.
A.V. (Translated by Cosmin Ghidoveanu)
In Q2 2011, the American economy grew at an annual rate of 1%, after advancing 0.4% in the first three months of the year.
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On Wednesday, the House of Representatives of the US Congress unexpectedly rejected the public spend
