The Fed's 'Twist' And The U.S. Economic Outlook

By Josh Cohen: Despite the predictions of two major investment banks about which I wrote yesterday, the FED opted not to launch QE3 today. While the FED did not announce QE3, it did elect the extend Operation Twist through the end of this year. I believe, however, that the extension of Twist will not be of much help to the real economy.

Submitted by Lance Roberts of StreetTalkLive blog, Each quarter the Fed releases their assessment of the economy and their forward looking projections for three years into the future. (See Fed Downgrades Economic Outlook for the December analysis)

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.This post is a guest contribution by Asha Bangalore, vice president and economist at The Northern Trust  Company.

The Fed came out blazing today, not that it will matter one iota to jobs (because it won't).

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. KEY POINTS: * 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 $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.

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.

The Federal Reserve Board announced on Thursday that it is raising the interest rate at which banks borrow from the Fed's discount window to 0.75%, a 25-basis-point increase, and intends to return discount lending primarily to the traditional overnight loans.