Federal Reserve Expected To Announce New Action To Spur Economy - KAUZ-TV: Newschannel 6 Now | Wichita Falls, TX

Federal Reserve Expected To Announce New Action To Spur Economy

WASHINGTON (AP) - After two days of policy-setting meetings, the Federal Reserve is expected today to reach back to the early 1960s to perk up the economy.

Most economists suspect the Fed will announce an approach called "Operation Twist." It involves shifting money in its $1.7 trillion portfolio from short-term securities to longer-term
holdings.

That would push the yield on Treasuries still lower, but could also reduce rates on mortgages and other consumer and business loans.

The four highest-ranking Republicans in Congress are already on record against moves to lower interest rates still more. They've written Fed Chairman Ben Bernanke that they fear it could trigger high inflation.

The Fed said recently that the economy will likely struggle for at least two more years.

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