Fed Extends ‘Twist’ Program to Drive Rates Lower

The Federal Reserve is extending a program designed to drive down long-term interest rates to spur borrowing and spending.

The Federal Reserve is extending a program designed to drive down long-term interest rates to spur borrowing and spending.

The Federal Reserve is extending a program intended to further lower long-term interest rates, noting hiring has weakened, consumer spending is rising more slowly and the economy needs more support.

WASHINGTON — The Federal Reserve ramped up its stimulus to the economy on Wednesday, expressing disappointment with the pace of recovery in employment as contentious U.S. budget talks heighten uncertainty about the outlook. The central bank replaced a more modest stimulus program due to expire at year-end with a fresh round of Treasury purchases that will increase its balance sheet. It committed to monthly purchases of US$45-billion in Treasuries on top of the US$40-billion per month in mortgage-backed bonds it started buying in September.

WASHINGTON — With a nervous eye on the “fiscal cliff,” the Federal Reserve is expected this week to announce a new bond-buying plan to support the U.S. economy. The goal would be to further reduce long-term interest rates and encourage borrowing by companies and individuals. If it succeeds, the Fed might at least soften the blow from tax increases and spending cuts that will kick in in January if Congress can’t reach a budget deal. But the Fed’s actions wouldn’t rescue the economy.

Fed extends Twist program with $267B more to drive long-term rates down, says US hiring weaker.

WASHINGTON – The Federal Reserve is expected to announce a fresh round of bond buying on Wednesday as part of its efforts to support a fragile economic recovery threatened by political wrangling over the government’s budget. The central bank looks certain both to extend its purchases of mortgage-backed debt and replace another expiring stimulus program with a new bout of money creation.