It's back to the future for the Federal Reserve.
Faced with a lethargic economy and a jobless rate hovering at 9 percent, the nation's central bank reached deep into its bag of tricks on Wednesday and pulled out a move to spur growth that it hadn't used in 50 years.
The move, dubbed "Operation Twist" when it was first used in 1961, is intended to push long-term interest rates lower, which the Fed hopes will spur lending, induce businesses to expand and tempt consumers into spending more.
The Fed said it will do that by selling $400 billion worth of short-term securities to buy longer-term securities, much like a homeowner swapping higher-rate credit card debt for a lower-rate home equity loan.
"The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less," the Fed said in a statement after a meeting of its Federal Open Market Committee.
"This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative," the Fed said. "The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate."
The Fed said the economy remains mired in a rut. Job growth is sluggish, household spending has been rising at a slow pace and the housing market is weak.
Its outlook wasn't much sunnier:
"The Committee continues to expect some pickup in the pace of recovery over coming quarters but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate," the Fed said, referring to its stated goals of promoting maximum employment and economic growth while keeping inflation in check.
The Fed also gave a nod to the European debt crisis, which threatens to expand and risks pushing the global economy back into recession:
"(T)here are significant downside risks to the economic outlook, including strains in global financial markets," the Fed said.
Inflation was one of the bright spots, the Fed said, as was business investment in equipment and software.
Not all the members the Fed's committee, which sets monetary policy, agreed with the move to push long-term interest rates lower. Three dissented because they did not support additional policy accomodation. The split on the FOMC was echoed in financial markets, which fell after the Fed made its announcement.
"The one thing that weighs on any decision here is that we are still seeing dissenters in the Fed. And that doesn't bode well for a stable recovery," Carl Larry, director of energy derivatives and research for Blue Ocean Brokerage, told Reuters.
The Federal Reserve announced 'Operation Twist, a policy involves selling $400 billion in short-term Treasuries in exchange for the same amount of longer-term bonds. CNBC's Sue Herera and msnbc's Tamron Hall report.