inspired by an article in about the coordination of actions during the program of buying long bonds by reinvesting / selling short bonds.
in theory, flattening the yield curve (decrease in yield at the long end) should negatively affect banks, but have a positive effect on some builders;) though, I can't imagine how decline % mortgage rates for 0,5% compensates for the deficit in aggregate demand in the economy as a whole, as well as will affect the prices of houses so, to trigger the richness effect (accelerator effect) or increase labor mobility (combating structural unemployment).
interesting another. Treasury can do the twist operation on its own: reducing the supply of long bonds, by increasing the supply of short. so question number 1: why goat accordion? question number 2 is even more interesting: why should treasuries cross out a more important goal – increase in debt (changing the structure of debt in favor of longer liabilities)? and the Treasury, in any case, will have to abandon this venture, if a FED starts operation twist.
what I don't understand about this whole story – this is the next. the Treasury has the potential to drastically increase its value. in other words, long-term growth risks can be drastically reduced % rates. why not do it?
there are three explanations:
1) no one believes in the risk of a jump % rates (а зря, some lerez n-years)
2) afraid of market distrust (late drink barjomi, on the contrary, this is done while the market still believes)
3) there are expectations of 10-year deflation (unlikely: look at the forecasts of CBO and everyone else)
all in all, a mystery to me;)
