Economics
Gross Says Fed Should ‘Switch’, Not ‘Twist,’ to Revive Economy
- Fed should sell long-dated debt, reinvest in short maturities
- Yield curve `inappropriately flat,' Janus fund manager says
Bill Gross Says Fed Should Sell Longer-Term Treasuries
This article is for subscribers only.
Bill Gross says the Federal Reserve should sell longer-term Treasuries and buy shorter-term notes to remedy the economy.
Longer-term debt usually carries higher interest rates than short-term loans, but the difference has flattened as central bankers keep rates low to stimulate growth. The Federal Reserve in 2012 initiated “Operation Twist,” purchasing 10-year Treasuries as a tool to revive U.S. growth and reduce the unemployment rate, a move that Gross asserts failed to build a strong economic foundation.