Back to top

Real Time Insight

As widely expected by the market, the Federal Reserve announced at the conclusion of their FOMC meeting that they will purchase longer-term treasury securities to replace "Operation Twist". Initially the purchases will be about $45 billion per month.

Operation Twist—which involves buying longer-term bonds and selling a like amount of shorter-term treasuries—is expiring at the end of this month.

Additionally, Fed buys 40 billion of agency mortgage-backed securities each month, under QE3. In all, Fed will continue to buy about $85 billion of longer-term bonds each month under the two programs.

Per their statement “these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative”.

Another important announcement in the release was the adoption of “economic targets” for unemployment and inflation. They decided to keep the target range for the fed funds rate between 0% and 0.25%-- as long as the unemployment rate remains above 6.5% and medium-term inflation does not exceed 2.5%

The action was supported by 11 members of FOMC, with dissent from Richmond Fed President Lacker.

Later today, Fed chairman Bernanke will hold a press conference and the central bank will also release its latest economic forecast.

In a recent WSJ survey, some economists said that the Fed should stop buying bonds as their acquisition is disrupting market dynamics. Do you agree?

Further, interest rates are already near all-time lows but the credit standards are still tight. So, do the consumers benefit from Fed moves?

And the businesses have put their spending and hiring plans on hold in view of the fiscal cliff uncertainty.

Do you think that the Fed move is positive for the markets? 

Just Released: 5 Stocks to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One is a "boring" business delivering blistering growth. Another is a red-hot oil and gas producer set to surge on a drilling breakthrough. Still another, an online payment provider, ignited a 53% sales explosion during the past year.

Close This Panel X

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%