the second half of last year. at that rate, the central tendency of our forecasts for the unemployment rate shows only a small improvement over the course of this year. and inflation is expected to run at or below our 2 percent longer - run goal. a number of factors that i mentioned earlier contribute to our judgment that the pace of expansion is likely to remain modest over coming quarters, including the depressed housing market, small real income gains, and the probability of continued fiscal restraint. in addition, the information on economic activity abroad, particularly in europe, seemed to be pointing to weaker demand for u. s. exports. monetary policy given the magnitude of the global financial crisis and its aftermath, the federal reserve acted to provide unprecedented monetary stimulus to promote and then support an economic recovery. in addition to moving the federal funds rate – our traditional policy tool – close to zero, we have engaged in balance sheet operations that are aimed at lowering longer - term yields. most recently, over the second half of 2011, the fomc decided to increase the average maturity of the federal reserve ’ s securities holdings through a program of purchases and sales and began to reinvest principal payments on agency securities in agency - guaranteed mortgage - backed securities rather than treasury securities. moreover, the fomc has worked to clarify its forward guidance about the future path of the federal funds rate, conditional on the outlook for economic activity and inflation. these actions were intended to put downward pressure on longer - term interest rates, support mortgage markets, and, more broadly, help foster financial conditions that would provide more support to economic growth. at the january fomc meeting, with our current projections for economic activity and inflation in mind, the committee decided that more accommodative financial conditions would be appropriate to help bring both inflation and unemployment back, over time, to levels viewed as consistent with the fomc ’ s longer - run objectives mandated by the congress. the fomc judged that economic conditions, including the outlook for low rates of resource utilization and subdued inflation over the medium run, are likely to warrant exceptionally low levels of the federal funds rate at least through late 2014, more than a year later than it had indicated in the postmeeting statements starting last august. extending the horizon of the forward guidance appeared to shift down investors ’ expectations regarding the future path of the target federal funds rate. if this expectation for low rates is realized, the federal funds rate will have remained near zero for a total of about

sarah bloom raskin : accommodative monetary policy and its effects on savers speech by ms sarah bloom raskin, member of the board of governors of the federal reserve system, at the y ’ s men and y ’ s women of westport, westport, connecticut, 1 march 2012. * * * good morning. i appreciate this opportunity to meet with you today. i am pleased to see that my parents are in the audience. i credit my parents with a lot, especially with promoting a strong work ethic in our family that taught us the fundamentals of a market economy. from a tender age, my brother and i had a series of unusual jobs. for example, kenneth gave french horn lessons. he was about 13 years old at the time, so our parents would not permit him to charge more than $ 1. 25 per hour. kenneth had four students. my mother permitted him to use the living room for lessons, as long as his students took off their muddy shoes at the door, so kenneth had no overhead expenses and was both grossing and netting about $ 5. 00 per week. given the scarcity of french horn teachers in our neighborhood, kenneth had a monopoly in the french horn market. so long as the local high school bands produced a steady stream of french horn players, kenneth was assured that his services would be in demand. i had an even less lucrative job that involved truly unskilled labor. i numbered pages. my father, who was in the publishing business, would, in the days before word processing, bring home book manuscripts that did not have page numbers on them. these manuscripts needed to be numbered, and that ’ s where i entered the market, so to speak. my father came up with the idea of paying me to number the manuscript pages. the rate he set for me was one cent – and that was not one cent per page, but one cent per two pages. needless to say, this wage was really too low for me, and i wanted to go on strike, but i was only 10 years old. by the time i became a teenager, and it occurred to me that i could strike, i had been displaced by the progress of technology – specifically, word processors with automatic numbering options – which reduced my bargaining power to, well, nothing. i could talk more about this particular job – noting the fact that even at the age of 10 i found this job to qualify as one of the most tedious known