Federal Reserve and BoE 'step up economy push'

22 September 2011

The US Federal Reserve and the Bank of England (BoE) have both signalled their intentions to help boost their respective economies as a result of downward pressures on global growth.

Operation Twist has been launched by the Federal Reserve, which is chaired by Ben Bernanke, as part of a drive to stimulate growth and reduce long-term interest rates - and the central bank said it is to purchase $400 billion of Treasuries that have remaining maturities of six-to-30 years as part of the project.

The body explained: "This programme should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative."

Meanwhile, the BoE's Monetary Policy Committee (MPC) has indicated a second round of quantitative easing could be in store - despite a majority voting against such action.

Indeed, most of the MPC noted a further asset purchase may be needed in the future to help loosen monetary conditions.

By Asim Shah

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