Will Mad Men take over the Fed?
* Over the last couple of days, the term “Operation Twist” has
become the buzzword of the markets.
* Operation Twist does not refer to a renewed quantitative easing
program. Rather, the policy, which was tried in 1961 (and took its
name from the dance craze of the time), aims to flatten the yield
curve, and it could be the Fed's next tool.
* While in theory such a policy seems to make sense, several caveats
lead us to conclude that it is not a monetary silver bullet.