Like they did last summer: Fed may Twist again

Reuters reports that it has become a familiar choreography for the Federal Reserve: Officials ease monetary policy, and the economy improves. Then conditions weaken, reviving debate about the need for further stimulus.  The central bank again finds itself at that difficult juncture heading into a meeting next week. As Europe's banking crisis intensifies and the labor market sputters, the Fed appears increasingly likely to offer more monetary stimulus - despite political opposition, internal reticence and concerns about whether it will be effective.

Given an outlook that is weak but not recessionary, the Fed could opt for the relatively low-hanging fruit of extending "Operation Twist," its effort to drive down long-term borrowing costs by selling short-term securities to buy longer-term ones. Another relatively costless tool it could employ would be to push official guidance for when overnight interest rates are likely to rise, now set at late 2014, even further into the future….

Wait…wait…there’s more at http://www.reuters.com/article/2012/06/13/us-usa-fed-idUSBRE85413N20120613