As I noted, the Committee set a criterion of substantial improvement in the outlook for the labor market as the condition for ending the new purchase program.
The Committee also signaled its expectation that it would end the purchases and return to an emphasis on rates policy and forward guidance before it had fully attained its dual mandate objectives, stating that “the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.”15 The reason for this sequencing choice, again, was the greater uncertainty about the costs and efficacy of LSAPs, relative to the more familiar tool of managing the current short-term interest rate and, through forward guidance, expectations of future short-term interest rates.