Financial Markets Slump on Doubts about Effectiveness of Operation Twist

Financial markets tumbled after the Fed announced to extend the average maturity of its holdings of securities so as to stimulate the economic recovery and to help ensure inflation is consistent with the dual mandate over time. While the measure had been widely anticipated, investors doubted its effectiveness in bolstering the economic recovery and stimulating the job market. They hoped the Fed would do something stronger, i.e. outright bond buying.

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Financial Markets Slump on Doubts about Effectiveness of Operation Twist