LGIM's Hodges: Market anticipates Fed will twist again

Legal & General Investment Management's bond manager Richard Hodges expects the Federal Reserve to unveil another round of Operation Twist later today.

The Federal Open Market Committee will at around 4.30pm today  announce whether it will unleash new measures to stimulate the US economy, through selling short-term bonds and buying long-dated securities. Last September the Fed began selling $400bn of short-term bonds, in an attempt to increase risk appetite and lower long-term interest rates. As this round comes to an end, Hodges, manager of the £1.5bn L&G Dynamic Bond trust, said the market is expecting the Fed to extend Operation Twist. "I think the market is trading on the assumption we are going to have Operation Twist again,"...