Although the frequency of liquidity operations has increased when necessary and the timing and maturity of liquidity provision has evolved over time, such actions aimed at reassuring market participants about the continuation of transactions in the money market and have neither involved substantial changes to the operational framework nor impinged on the monetary policy decisions and the primary objective of price stability.
Of course, the baseline trajectory is purely illustrative: The actual evolution of the Federal Reserve’s balance sheet will depend on the decisions that the FOMC will make in light of economic and financial developments. Nonetheless, the overall characteristics of this assumed trajectory seem broadly consistent with the sense of the Committee’s discussions last spring.