In today’s article, we will try to explain the Operation Twist application implemented by the Fed. In short, Operation Twist is an exchange operation. The Fed, the Federal Reserve, issues existing short-term bonds and receives long-term bonds in return.
The Fed implements Operation Twist to activate and revitalize the economic market. This definition can also be made as a manual change of the dollar yield curve, but the people consume more credit and take a more active role in the market during these periods. Since this credit consumption will affect the state badly in a long time, it is seen as a perilous intervention by the states and is not applied continuously.