A similar argument applies to provincial government bond markets, which are seeing significant strains—hence our decision to supplement our program to buy provincial money market securities by also buying up to $ billion in provincial bonds. Governing Council also noted that the corporate bond market continues to show signs of stress, although our program to purchase commercial paper has helped.
Second, in describing the costs of the existing arrangements, the paper estimates that the Treasury’s post-2008 extension of the weighted average maturity (or duration) of the Federal debt offset – in a purely mechanical sense – about 35 percent of the effect of the Federal Reserve’s large-scale asset purchase (LSAP) programs on the level of 10-year Treasury yields.