To date, our actions have kept the federal funds rate – the traditional instrument of monetary policy – near zero for almost three years. The Fed’s balance sheet has grown more than threefold, from nearly $ billion before the crisis to about $ trillion today. Moreover, the asset composition has shifted significantly from mostly short-term Treasuries to longer-term Treasuries, mortgagebacked securities, and agency debt.
2  BIS Review 115/2006  Following these assertions, or if you wish, assumptions, what have we learnt, and what can we put into practice? Let me be very frank with you and speak of what I know, and not what I assume.