Here is the Federal Reserve’s FAQs about operation twist. The immediate impact on long-term Treasury yields was extremely small, about 6 basis points (a rough estimate at this point – there was a lot of movement in yields in the hour before the 2:15 PM announcement time). Research by my colleagues suggests this effect is probably due to the liquidity effects of fewer Treasuries (research paper). Whether the stock market reacted to how little twist did, or to the fact that everyone paid attention to the macroeconomic situation at the same time, or to other events in European, the stock market was not happy. In my opinion, there is little that the Federal Reserve can or should do to increase employment and reduce output (given that it must also commit to low inflation), and there are real risks to decreasing the maturity structure of U.S. debt held by the public. Recent history suggests that suggest that borrowing short to fund long-term projects increases downside risks. Let me ask a grim question for a moment: if debt markets ran on (meaning from) US debt, would the resulting budget crisis – spending cuts, tax increases, and congressional lunacy – justify the run?