Fed extends Operation Twist by $267bn but cuts growth forecast

The Federal Reserve announced plans to extend Operation Twist by $267bn as it cut its growth forecast for the US economy from 2.9% to 2.4% in 2012.

The Federal Open Market Committee stopped short of adopting a more aggressive monetary policy through QE3 despite implying the US recovery had not been as strong as hoped in the past few months. Instead the Fed will continue to sell short-term bonds, with a duration of three years of less, while purchasing $267bn worth of longer-term securities with maturities between six and 30 years through Operation Twist, a plan which began last summer. The decision was not unanimous, with one Fed committee member, Jeffery Lacker, voting against the decision. Ben Bernanke, the Fed's chairman, d...