Fed extends Operation Twist through year-end, no QE3


FXstreet.com (Córdoba) - The Federal Reserve decided Wednesday to keep the target range for the federal funds rate at 0-0.25%, while extending its Operation Twist, a program aimed to lower long-term interest rates by selling shorter-term bonds and using the funds to buy longer-term bonds.

Announced in September 2011, Operation Twist was scheduled to expire at the end of June, but the FOMC announced today it will extend it through the end of the year, resulting in about a $267 bln addition to Operation Twist.

Many analysts had predicted the Fed was going to extend Operation Twist, rather than announcing another round of quantitative easing.

However, the Fed reiterated in its statement that "is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.

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