Herb was willing to consider new ideas and new approaches to government policy, and that openness fits with the subject of my remarks today. Namely, I will discuss the unconventional monetary policy tools used by the Federal Reserve since the start of the financial crisis and Great Recession and the role that those tools may play in addressing future economic challenges.
Nearly 10 years ago, with our nation mired in its worst economic and financial crisis since the Great Depression, the Federal Open Market Committee (FOMC) confronted a key challenge to the pursuit of its congressionally mandated goals of maximum employment and price stability: how to support a weakening U.S. economy once our main conventional policy tool, the federal funds rate, had been lowered to essentially zero.