In addition, term premiums on long-term U.S. Treasury securities are estimated to have declined substantially since the late 1980s. 4 Moreover, this  4  Kim, Don H. and Jonathan H. Wright (2005), “An Arbitrage-Free Three-Factor Term Structure Model and the Recent Behavior of Long-Term Yields and Distant-Horizon Forward Rates,” FEDS 2005-33.
Although empirical analysis suggests that unconventional tools affect the economy through the same channels as the federal funds rate, even so, there are greater costs and uncertainties associated with unconventional policies relative to changes in the federal funds rate. 16As a result, policy is likely to remain more constrained at the zero lower bound than above it.