TREASURIES-Bond prices fall after Fed sets new purchase program

* Fed announces $45 bln/month of Treasury buying

* Fed adopts numerical thresholds for policy

* Benchmark yields range-bound in "fiscal cliff" worries

NEW YORK, Dec 12 (Reuters) - U.S. Treasury debt prices sank on Wednesday after the Federal Reserve's announcement of a new bond buying program disappointed investors because purchases of longer-dated securities will fall with the expiration of "Operation Twist" at month-end The Fed committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.

In a surprise move, the Fed also adopted numerical thresholds for policy. The bank said it will likely keep official rates near zero as long as unemployment remains above 6.5 percent, inflation one to two years ahead is projected to be no more than 2.5 percent, and long-term inflation expectations remain contained. "By having a relatively high threshold at 6.5 percent unemployment, it is really an unchanged policy stance," said Ira Jersey, an interest rate strategist, Credit Suisse, New York. "They are basically taking out the same amount of duration that they were in Twist, but they are buying less in the long-end than they had been before," said Ira Jersey, an interest rate strategist, Credit Suisse, New York. Under Twist, the Fed has been selling shorter-dated Treasuries and using the proceeds to buy longer-dated debt. The program is set to expire at the end of December, and analysts say the Fed has little to no shorter-dated debt to sell. "They are buying less in 7s through bonds and buying some of the 5s, which they weren't doing before," Jersey added. After an initial bounce higher, Treasuries plunged. The benchmark 10-year notes fell 11/32 in price to yield 1.692 percent. Prices on 30-year bonds slumped 1-02/32 to yield 2.894 percent, the highest in more than a month. Treasuries had edged slightly higher on Wednesday following strong demand in the sale of $21 billion of 10-year notes. The Treasury on Thursday will sell $13 billion of 30-year bonds, and next week it will auction two-year, five-year and seven-year notes, along with five-year Treasury inflation-protected securities. The Treasury on Tuesday sold $32 billion of three-year notes.