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How might the Fed's large-scale asset purchases lower long-term interest rates?


  • Renee Courtois Haltom
  • Juan Carlos Hatchondo


Over the past two years the Federal Reserve has engaged in large-scale asset purchases (LSAPs), often grouped under the heading of "quantitative easing," as an alternative means of stimulating the economy when policy rates are at their zero lower bound. Theoretical and empirical research shows how this policy may lower long-term interest rates, and financial market data suggest that the initial launch of LSAPs had an effect on expectations about future Fed policy.

Suggested Citation

  • Renee Courtois Haltom & Juan Carlos Hatchondo, 2011. "How might the Fed's large-scale asset purchases lower long-term interest rates?," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, issue Jan.
  • Handle: RePEc:fip:fedreb:y:2011:i:jan:n:11-1

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    Cited by:

    1. Martina Cecioni & Giuseppe Ferrero & Alessandro Secchi, 2011. "Unconventional Monetary Policy in Theory and in Practice," Questioni di Economia e Finanza (Occasional Papers) 102, Bank of Italy, Economic Research and International Relations Area.

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