——— (2012b). “Federal Reserve Issues FOMC Statement,” press release, June 20. ——— (2012c). “Federal Reserve Issues FOMC Statement,” press release, December 12. 18  By the logic described earlier, the Fed’s maintenance of a large balance sheet (by reinvesting principal paydowns and rolling over maturing securities) should continue to put downward pressure on term premiums and longer-term interest rates, even after purchases end.
Also, as I noted at my June press conference, a strong majority of the Committee now expects that there will be no sales of agency MBS during the process of normalizing monetary policy, although in the longer run limited sales could be used to reduce or eliminate residual MBS holdings. See Board of Governors (2013c). 19  See Yellen (2013).