As you know, the Federal Reserve took strong easing measures during the financial crisis and recession, cutting its target for the federal funds rate – the traditional tool of monetary policy – to nearly zero by the end of 2008.
Since that time, we have provided additional accommodation through two nontraditional policy tools aimed at putting downward pressure on longer-term interest rates: asset purchases that reduce the supply of longer-term securities outstanding in the market, and communication about the future path of monetary policy.