Fed watchers believe the Federal Reserve will extend their Operation Twist at the end of Wednesday's two day meeting. In fact, a majority of our nation's economists and speculators are jumping on the "extended twist bandwagon." Top analysts and many constituents alike believe the Fed will enact an extension on the twist program.
At the end of this month, the $400 billion Twist program will set to expire unless a decision is made in the next two weeks to extend the twist program. Currently, the Fed has approximatley $180 billion of short-term Treasurys remaining for sale. Some speculation suggests that the Fed will also buy mortgage-backed securities in the new round of Operation Twist...
According to MarketWatch:
The risks of extreme financial contagion subsided Sunday night in the wake of the Greek election. Economists said this would lower the odds for a massive new bond-buying program, known as the third quantitative easing or QE3.
…
The Fed has bought over $2.3 trillion of Treasurys and housing-related assets to bring down interest rates. The Fed’s traditional short-term interest-rate policy tool — the fed funds target — has been close to zero since December 2008.
Fed Chairman Ben Bernanke certainly didn’t endorse more easing in his testimony to Congress last week, and as a result, some analysts think the U.S. central bank will stay on hold to see how things pan out over the next few months. But they admit it is a close call.
As the economy struggles, departments stores and other retail companies have recorded plummeting gains over the past few months. Inflation rates can't seem to be maintained either. The compilation of data may push the Fed to follow through with further twist action.
Take a look at how the charts below to get a better idea of how consumers are cutting back amidst the economic slowdown. See just how quickly middle class wealth really is disappearing.
Author: MarketWatchcharts powered by iChartsAuthor: charts powered by iCharts
No comments:
Post a Comment