The Fed made "Operation Twist" official after the FOMC Meeting

Not a shock and awe operation as some might have expected from the Fed's statement today after the FOMC meeting. The Fed basically will buy $400 billion of long-term Treasury and sell $400 in short-term (which some might call this "Operation Twist") until the middle of 2012. This is equivalent of trying to flatten the yield curve.  As a result, there will be no significant money supply expansion for the time being.  However, this is only the official stance of the Fed's policy as of now. The Fed can of course step in anytime to pump in liquidity into the market if need be. From the statement, the Fed's view is that the US economy is still struggling to find a foot hold and remains anemic.

Trends as results of announcement:     bank stocks  DOWN  gold  DOWN