The Bullard comments are out in the WSJ and he says that after Operation Twist expires, a new $25 billion Treasury buying program would stimulate the economy.
“One way to stay the course would be to say that the Fed would purchase the same number of long-term Treasury securities that we’re purchasing now but that they would be outright purchases instead of a Twist operation. I think that is a little bit too dovish. I think the Twist operation is probably not as stimulative as the outright purchase operation. So I think you could have slightly less purchases, less than the $45 billion, and still get the same amount of stimulus that you would get in a Twist program. But I wouldn’t want to prejudge where the committee is going to come down on that.”
Bullard said $25B of outright purchases would be equivalent to the current OpTwist program. The consensus is higher — around $40 billion, in addition to the $40 billion of MBS that the Fed is already buying each month.