To achieve these goals, Congress cast the Federal Reserve in the often difficult position of providing payment services, thereby competing with some of the institutions it regulates, and regulating the payments system in which it is an active participant. We are very mindful of these sometimes conflicting responsibilities and take great pains to ensure that each responsibility is addressed fairly and equitably.
Without sufficient sterilization capacity, the quantity of reserves increased to a point that the Federal Reserve had difficulty maintaining effective control over the federal funds rate. Of course, by the end of 2008, stabilizing the federal funds rate at a level materially above zero was not an immediate concern because the economy clearly needed very low shortterm interest rates.