One such tool is forward guidance: By credibly conveying to the public that policymakers will likely pursue a path for the policy rate that is lower than previously anticipated, policymakers can put downward pressure on longer-term interest rates.
In addition, policymakers can implement policies such as large-scale asset purchases (LSAPs) that affect the size and composition of the balance sheet: By purchasing longer-term securities in the open market, the Federal Reserve reduces the quantity of such assets  3  The extent and origins of the global decline in neutral interest rates are much debated.