The New Fed Policy

So where does this leave us? Unfortunately, we now know less than we did before, because we don’t know what criteria will be employed to adjust the asset program or by how much it will be adjusted. Moreover, given the committee’s indication that now the program may not only be extended but also incrementally adjusted up or down, projections about the ending of the program and the timing of the exit from policy accommodation are now less certain. Finally, while the incremental adjustments in additional purchases were discussed, the same kinds of considerations also apply to incremental asset sales from the program once a reversal in policy begins. 

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