By contrast, the economic effects of purchasing large volumes of longer-term assets, and the accompanying expansion of the reserve base in the banking system, are much less well understood. One question involves the direct effects of the large-scale asset purchases themselves.
The theory behind the Federal Reserve’s actions was fairly clear: Arbitrage  5  A clear-cut assessment of the effects of the introduction of the “extended period” language, however, is complicated by the fact that the FOMC also decided at the March 2009 meeting to increase the size of the Federal Reserve balance sheet further by purchasing up to an additional $ billion of agency MBS, bringing its total purchases of these securities to up to $ trillion, and to increase its purchases of agency debt by up to $ billion to a total of up to $ billion.