And when, in the choice between two repo-rate paths, the majority of the members of the Executive Board choose a path that provides poorer target attainment for both inflation and resource utilisation, this may undeniably give the impression that monetary policy has more targets than inflation and resource utilisation. 1 If, in addition, repo-rate increases are justified with reference to factors such as high growth, house prices, household indebtedness, the low level of interest rates, possible financial imbalances in the future and so on, there is a risk that this impression will be strengthened. If so, monetary policy will become unclear. 1  At the monetary policy meeting in June 2010, the repo rate was increased despite the fact that the CPIF forecast was below 2 per cent and the forecasts for all the measures of resource utilisation were below a normal level. An unchanged repo rate would have entailed a CPIF forecast closer to the target and forecasts for resource utilisation closer to a normal level. BIS central bankers’ speeches  1  Third, I would like to explain in more detail why I entered a reservation at the latest monetary policy meeting and how I arrived at a significantly lower repo-rate path than the path in the main scenario. The Riksbank conducts flexible inflation targeting – but what does this mean in practice?
22 In addition to making asset purchases, these central banks also developed programs targeting bank lending  channels, given that their capital markets are smaller relative to the banking system compared to the United States. 23 For example, 5-year Fannie Mae debt securities, which had traded, on average, 42 basis points above similar-  maturity Treasury securities in 2007, traded as high as 159 basis points above Treasury securities in November 2008. Similarly, current coupon agency MBS spreads averaged 137 basis points above similar-maturity Treasury securities in 2007; that spread was as high as 288 basis points in November 2008. Both of these spread levels in November 2008 were at or near the highest spread levels in many decades of available data. 24 On November 25, 2008, the FOMC announced purchases of $ billion in agency debt and $ billion in  agency MBS. On March 18, 2009, this program was modified to include a total of $ billion in agency debt and $ billion in agency MBS, as well as $ billion in longer-term Treasury securities. 25 Federal Reserve Board of Governors press release, November 25, 2008. 26 See Hancock and Passmore (2011) 27 See Gagnon, Raskin, Remache and Sack (2010). 28 Note that at that time the Federal Reserve was already in the middle of the maturity extension program (MEP)  which was selling shorter-maturity Treasury securities and purchasing longer-maturity Treasury securities. When the MEP expired in December, purchases of $ billion per month in Treasury securities were added to the LSAP.