Capital Economics: Fed likely to replace Operation Twist with more QE3 via HousingWire

The Federal Reserve is likely to expand the third installment of its open-ended quantitative easing program, under which the Fed is currently purchasing $40 billion of agency mortgage-backed securities per month. This extended QE stimulus is expected to replace the expiring Operation Twist, according to Capital Economics.

Analysts with Capital Economics predict the Fed will use the next Federal Open Market Committee, concluding on Dec. 12, to announce plans to continue buying $40 billion of long-term Treasury securities each month. The Fed also could adopt "numerical threshold for its guidance" in regards to the duration of short sales to remain at near zero, Capital Economics said.

Read more...Capital Economics: Fed likely to replace Operation Twist with more QE3 | HousingWire