Fed's Lockhart: Extending Twist on the table (by Greg Robb)

WASHINGTON (MarketWatch) - A move to extend the Federal Reserve's Operation Twist program remains an option on the table, said Dennis Lockhart, the president of the Atlanta Federal Reserve Bank on Wednesday. Lockhart's comment came in a discussion with reporters after a speech in Fort Lauderdale, Fla. The Fed's $400 billion Twist program, to extend the maturity of the central bank's balance sheet, is now set to expire at the end of June. In his prepared remarks, Lockhart expressed more worry about the economic outlook, saying that risks to the economy "are gathering." Lockhart said that he saw a higher probability of a negative influence on the U.S. economy coming from Europe than he did at the last Federal Open Market Committee meeting in April. Lockhart said his baseline forecast was for a continued, though modest, growth. If this no longer looks realistic, further Fed action "will certainly need to be considered." The Fed must "maintain a state of readiness" to respond to financial and economic instability should the need arise.