WASHINGTON — The Federal Reserve Board said it will sell $400 billion in short-term Treasuries for longer-term holdings by 2012 as its latest effort to kick start the economy.

The central bank's newest strategy employed to help stimulate a lagging economy and keep inflation rates low, dubbed "Operation Twist," will be completed by next June, the Federal Open Market Committee said in a statement.

"This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative," the FOMC said after its two-day meeting concluded.

As they did in a meeting last August, three members dissented on Wednesday's decision: Richard Fisher, Narayana Kocherlakota, and Charles I. Plosser.

The central bank had previously completed a $600 billion bond-buying program as part of an effort to help keep rates low. Economists had been anticipating that the Fed would take serious action after announcing plans in August to extend its planned one-day meeting in September to two days.

Separately, the Fed agreed to reinvest maturing agency bonds and assets in agency-backed mortgage debt, which had previously been invested in Treasuries.

In keeping with its August decision, the Fed agreed to keep the federal funds rate at a near zero level through 2013.

Meanwhile, members said that although the pace of recovery will pick up over the next coming quarters, they anticipate the unemployment rate will decline only gradually. They also cited significant downside risks to the economic outlook, including pressure from global financial markets.

The FOMC said it would continue to closely watch inflation expectations.

-- This article first appeared on American Banker.