<P> The Federal Open Market Committee action known as Operation Twist ( named for the twist dance craze of the time ) began in 1961 . The intent was to flatten the yield curve in order to promote capital inflows and strengthen the dollar . The Fed utilized open market operations to shorten the maturity of public debt in the open market . It performs the ' twist ' by selling some of the short term debt ( with three years or less to maturity ) it purchased as part of the quantitative easing policy back into the market and using the money received from this to buy longer term government debt . Although this action was marginally successful in reducing the spread between long - term maturities and short - term maturities , Vincent Reinhart and others have suggested it did not continue for a sufficient period of time to be effective . Despite being considered a failure since a 1966 near - term analysis by Franco Modigliani and Richard Sutch , the action has subsequently been reexamined and in a 2011 paper economist Eric Swanson of the Federal Reserve Bank of San Francisco has suggested that `` Operation Twist '' was more effective than originally thought . Swanson suggested similar action as an alternative to quantitative easing by central banks ; the FOMC did in fact take an analogous action in 2011 . </P>
<P> The Federal Open Market Committee action known as Operation Twist ( named for the twist dance craze of the time ) began in 1961 . The intent was to flatten the yield curve in order to promote capital inflows and strengthen the dollar . The Fed utilized open market operations to shorten the maturity of public debt in the open market . It performs the ' twist ' by selling some of the short term debt ( with three years or less to maturity ) it purchased as part of the quantitative easing policy back into the market and using the money received from this to buy longer term government debt . Although this action was marginally successful in reducing the spread between long - term maturities and short - term maturities , Vincent Reinhart and others have suggested it did not continue for a sufficient period of time to be effective . Despite being considered a failure since a 1966 near - term analysis by Franco Modigliani and Richard Sutch , the action has subsequently been reexamined and in a 2011 paper economist Eric Swanson of the Federal Reserve Bank of San Francisco has suggested that `` Operation Twist '' was more effective than originally thought . Swanson suggested similar action as an alternative to quantitative easing by central banks ; the FOMC did in fact take an analogous action in 2011 . </P>
when did the fed start using open market operations
when did the fed start using open market operations
1961
1961