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BlackRock’s Fisher: Time to End ‘Operation Twist’

Monday, 20 Aug 2012 | 9:02 PM ET

“Operation Twist” has outlived its usefulness and should be retired, BlackRock Global Head of Fixed Income Peter Fisher told CNBC on Monday.

Economic Recovery or Recession?
Stocks ended near highs today, but still closed lower. Peter Fisher, BlackRock, shares his take on the so-called fiscal cliff, and the state of the U.S. economy.

“I think Operation Twist, it’s time to put it on the shelf. I don’t see why driving down the term premium will help us create more credit in our economy,” he said on “The Kudlow Report.” “I know the Fed thinks it will through a portfolio rebalancing.”

Fisher added that he believed continuing could create a liquidity trap.

“You keep pushing down on the term premium, you’re reducing the opportunity cost of putting your money in cash,” he said.

The economy faces a historic headwind, Fisher also said.

“It was the end of a 30-year run bull run in credit creation. Let’s be clear: We got over exuberant with credit creation. When you squeeze back on the financial system, it’s a slow recovery. That's part of it,” he said.

WATCH the entire interview with BlackRock's Peter Fisher.

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"The Kudlow Report" airs weeknights at 7 p.m. ET.

Questions? Comments, send your emails to: lkudlow@kudlow.com

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  • Lawrence Kudlow is a CNBC senior contributor. Previously, Kudlow was anchor of CNBC's prime-time program "The Kudlow Report"