Markets Keep Eye on Europe, But Hopes Are Resting on Fed

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“It's the only thing keeping us (stocks) elevated here,” said Miller Tabak strategist Peter Boockvar, of the Fed meeting. “Fundamentally, the market belongs much lower, but everybody thinks the Fed's extending Operation Twist or will pull something else out of its hat.”

In Operation Twist, the Fed has been selling shorter dated Treasurys while buying the same amount of longer dated securities in a bid to keep interest rates low. Many analysts believe the Fed Wednesday could extend the program, while it watches developments in Europe and the state of the U.S. economy.

“I think the Fed probably wants to do a little something, and that little something probably is extending its Operation Twist instead of it expiring at the end of this month. But largely, the Fed is going to want to keep its powder dry ,” said Larry Kantor, managing director and head of research at Barclays ... Continue to read.

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