Presumably, the requisite scale of such purchases—when combined with medium-term yield curve ceilings and forward guidance on the policy  19  See Ben Bernanke, Michael Kiley, and John Roberts (2019), “Monetary Policy Strategies for a Low-Rate Environment,” Finance and Economics Discussion Series 2019-009 (Washington: Board of Governors of the Federal Reserve System), https://doi.org/10.17016/FEDS.2019.009; and Chung and others, “Monetary Policy Options at the Effective Lower Bound,” in note 9.
- 13 rate—would be relatively smaller than if the longer-term asset purchases were used alone. Monetary Policy and Financial Stability Before closing, it is important to recall another important lesson of the financial crisis: The stability of the financial system is important to the achievement of the statutory goals of full employment and 2 percent inflation.