Operation Twist: Investors waiting Federal Reserve announcement, Ben Bernanke has explicitly said it would be “very reckless”

Hello friends, All eyes are on the Federal Reserve monetary policy announcement as global economic growth concerns retake the spotlight from fears of a sudden rupture in the Eurozone after the weekend's pro-bailout outcome to the Greek general election. With Europe expected to sink into recession while Asia sees its slowest growth since 2009 (according to a survey of economists polled by Bloomberg) this year, traders are looking to the US to offer a counterbalance.

With US Treasury yields already near record lows, the likelihood that more QE can generate a substantial increase in lending seems implausible.

Meanwhile, Ben Bernanke has explicitly said it would be "very reckless" to seek a pickup in economic activity at the expense of higher inflation, meaning a QE3 program that amounts to little more than a confidence-building exercise is unlikely.

Still, US economic data has increasingly underperformed over the past two months, meaning a reboot of the so-called "Operation Twist" - a scheme meant to target a reduction in long-term borrowing costs in place since late September - and perhaps another extension of the time period within which rates are pledged to be kept low seems appropriate.
On balance, this would amount to a reinstatement of the status quo considering Operation Twist is due to expire this month.

With markets pining for accommodation, this is likely to disappoint investors and drive risk aversion, sinking growth-geared copper and crude oil prices. Gold and silver are also vulnerable amid receding demand for precious metals as a store-of-value hedge against dilution of paper currencies