Asset purchases are being deployed to add near-term momentum to the economy. After those purchases are eventually completed, the purchased assets will remain on the Fed’s balance sheet for some time and continue to put downward pressure on rates. The Committee will continue to use interest rate policy, including forward guidance about short-term rates, as we return to full employment.
Under the single receivership model, the major subsidiaries of the SIFI continue to operate as going concerns. This approach holds great promise, but ensuring its viability as a resolution option requires, among other things, that each SIFI maintain an amount of long-term unsecured debt that is sufficient to absorb very significant losses at the firm.