• Lengthening maturities of holdings
• Twist has supported economic recovery; longer rates lower than they otherwise would be
• Economy expanding at moderate pace despite Europe, housing and fiscal constrains from govts
• Unemployment remains elevated; slower progress in job growth
• Outlook has changed, Fed has not been start-stop
• Non-conventional tools tend to be discrete in size but still persist in accommodation
• Prepared to do what is necessary
• Data has been weak but there are issue with weather, seasonal adjustments
• Extending Twist is substantive step
• More QE is additional step that can be taken
• Monetary policy by itself will not solve problems; welcomes help from government
• Fed still has tools; non-standard but can still support economy
• Both QE1 and QE2 were effective; QE2 ended incipient deflation
• We can lower interest rates more
• Unorthodox tools have some costs
• European first line of defense for own problems; a very wealthy area; leave leadership to them; consults frequently with European central bankers; Europe has adequate resources to deal with problems
• Fiscal cliff will have impact later this year, markets don’t like uncertainty