May 16, 2012 / 6:20 PM / in 7 years

Fed's Bullard-Operation Twist likely to simply end

LOUISVILLE, Ky., May 16 (Reuters) - The Federal Reserve’s current bond trading to extend the average maturity of its portfolio should end on schedule next month without disrupting financial markets, a top policymaker said on Wednesday.

“I think it’ll go smoothly and we’ll simply end the program,” St. Louis Fed President James Bullard said in response to questions from journalists after a speech.

The Fed has bought longer-dated Treasury securities and sold shorter-term notes in an effort to push down longer-term interest rates. That program, which many refer to as Operation Twist after a similar initiative in the 1960s, is due to come to a close at the end of June.

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