The Fed decided to extend its Operation Twist program through the end of the year in its monthly meeting held June 20. It stopped short of initiating a third quantitative easing (QE3). Instead, it will be buying $267 billion in long-term Treasury bonds and notes with maturities ranging from six to thirty years and selling Treasury securities with maturities of up to three years.
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It was thought the Fed might purchase long maturity mortgage bonds instead of Treasuries. But it chose a less aggressive strategy, stating that it stood ready to take more aggressive measures if they are needed. More aggressive action would likely be QE3.
The Fed will announce revised forecasts later today that are expected to reflect slower growth through the balance of the year.
The June meeting had two new participants, Fed governors
Jeremy Stein and Jerome Powell. Fed governors as well as the president of the New York Fed vote at each meeting. The other 11 presidents of Federal Reserve banks vote on a rotating basis.