What are the historical parallels of FED?

The Fed has already had experience with the purchase of government bonds. Before the Federal Reserve-Treasury Accord of 1951, the Fed fixed the yields on ten-year Treasury bonds for nearly a decade to 2.5 percent. Even for government securities with a maturity of one year, they established a fixed yield level of 0875 to 1.25 percent for Treasury bills with a maturity of 90 days it was at 0375 per cent.

The central bank was reached without a large stock of paper to keep. 1945, for example, the Fed held only seven percent of the outstanding bonds, 1951, there were 9.2 percent. For comparison: At the turn of the millennium, the rate was just under ten percent.

In the 60s reaffirmed the U.S. government in the post-war experience and presented the program “Operation Twist” on. It should be the same short-term rates and long-term interest rates increased by purchases and sales are reduced. According to Fed Chairman Bernanke is the opinion of the professional world on the success of this action divided. Much could be read from the episode do not: “The action was rather small scale. In addition, there were no targets defined and the key was not even close to zero,” said Bernanke in a speech in November 2002.

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