What’s next for the Fed?

The next FOMC meeting is December 12.

At that point, the Fed will have to make a decision in regards to Treasury buying. Operation Twist is scheduled to end and the stock of shorter-term Treasury holdings is running thin so extending the program probably isn’t an option.

The decision will be to end the program, or announce more bond buying. More Treasury buying could be combined with QE3 MBS buying at the current $40 billion/month pace (unlikely), or the total could increase (more likely).

In the meantime, the Fed will have two employment reports, an election and numerous other data points to consider.