By removing additional longer-term Treasury securities from the market, the Fed’s asset purchases also induce private investors to acquire other  3  Congressional Budget Office (2012), Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013 (Washington: CBO, May). The effect of the fiscal cliff on real GDP is shown in table 2 (p. 6).
The effect of the fiscal cliff on employment, relative to a less restrictive alternative fiscal scenario that assumes that most expiring tax provisions are extended and that the spending sequestration does not take effect, is shown in table 3 (p.7).