In pursuit of these goals, the FOMC brought the target federal funds rate down close to zero by late 2008; conducted large-scale purchases of longer-term securities during 2009 and early 2010; and, last summer, modified its reinvestment policy to keep the Federal Reserve’s balance sheet from shrinking as mortgage-related securities matured or were redeemed.
In early November, the Committee announced that it intends to purchase an additional $ billion in longer-term Treasury securities by the middle of this year. The rationale for the asset purchase program Macroeconomic conditions To understand the rationale for our asset purchase program, it is helpful to review the evolution of macroeconomic conditions over the past several years.