from the Dallas Fed
In pursuit of its dual mandate – maximum sustainable employment and price stability – the Federal Reserve has followed a highly accommodative monetary policy. Accommodation is evident both in the level of short-term interest rates (essentially zero) and in the size of the Fed’s balance sheet ($4.4 trillion as of September 2014, up from $1 trillion just before the collapse of Lehman Brothers in September 2008).
As Fed officials contemplate the future course of policy, they must consider how near they are to achieving their objectives. That judgment depends on an assessment of the progress made to date and of the economy’s likely trajectory over the period required for past policy actions to have full effect. Past actions have imparted forward momentum to the economy that must be taken into account when deciding how much current monetary stimulus is appropriate.