Operation Twist is a clever way for the Federal Reserve to stimulate the economy when interest rates are zero. Named after a dance craze from the 1960s, the Federal Reserve was inspired by the Chubby Checker hit “The Twist” that made Billboard records across the nation. When an economy is weak, central banks usually respond by lowering interest rates but when interest rates are already zero, further rate cuts are not an option. So what can a central bank do?
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