I am delighted to participate in this Brimmer Policy Forum, not least because this year marks the 45th anniversary of Andrew’s appointment by President Johnson as a Governor of the Federal Reserve Board. Andrew’s ongoing work in organizing this annual forum reflects his long-standing commitment to fostering economic analysis and public discourse on key policy issues. In my remarks today, I will discuss the rationale for the decision by the Federal Open Market Committee (FOMC) in November to initiate a new program of asset purchases, and I will address some frequently asked questions (FAQs) regarding the program’s economic and financial effects both here and abroad. 1 The purpose of the new asset purchase program, like all of the monetary policy actions taken by the FOMC since the onset of the global financial crisis, is to fulfill our congressionally mandated objectives of promoting maximum employment and price stability. 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 a
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