Daily Market Update 12/12/12

Rates remained near record lows Wednesday ahead of this afternoon’s Fed announcement, which is due out at 12:30 PM.  Fed Chairman Ben Bernanke will hold a press conference at 2:15.  The Fed’s “Operation Twist” stimulus program is set to expire at the end of the year.  Under the program, the Fed sells short-term Treasurys and buys an equal amount of long-term Treasurys to help keep long term rates low.  Investors expect the Fed to announce a replacement program in which the Fed simply purchases long-term Treasurys in addition to the $40 billion of mortgage-backed securities now being purchased monthly.  In economic news, November Import Prices declined 0.9%, below the consensus forecast of -0.5%, mostly due to lower energy prices.  No other key data will be released today.

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