forecasting inflation and in assessing the appropriate course of monetary policy. it is important that, as the forces retraining inflation dissipate or reverse, that this upward pressure on inflation is not reinforced by inflationary pressures generated from very high utilization rates. the key to sustaining the best possible performance going forward is making the transition from the current state where performance is exceptional but unsustainable to the best possible sustainable state. that will require a slowdown in growth, preferably in the near term. asia may accomplish this, in which case it would substitute for monetary tightening that in my judgment would otherwise be required. [UNK]

these tools. the fed ’ s asset purchases did not have the conventional aim of increasing reserve balances to pull down short - term rates. 8 rather, purchases of longer - term securities lowered longerterm yields through portfolio balance effects. the evolution of our asset purchases reflected a learning process for policymakers. in the early programs, the fomc specified the expected quantities of assets to be acquired over a defined period. in contrast, with qe3 ( the most recent round of quantitative easing, implemented from september 2012 to october 2014 ), the fomc announced that we would continue to purchase securities at a certain monthly pace until the outlook for the labor market improved substantially in a context of price stability. later, the fomc noted that the pace of purchases was also data dependent, allowing the pace to be revised based on its assessment of progress toward its long - run objectives. a key trigger for the crisis was the decline in housing prices, which began in 2006 and led to uncertainty about mortgage investments. in the summer of 2007, two large financial institutions – the bear stearns companies, inc., and bnp paribas group – suspended redemptions from certain investment funds, perhaps marking the beginning of the financial crisis. in 2008, the crisis intensified with the near collapse of bear stearns in march and the bankruptcy of lehman brothers holdings in september ; a full - scale financial panic ensued across much of the global financial system. in our role as lender of last resort, we worked closely with the treasury department and the federal deposit insurance corporation ( fdic ). for example, to stem the run on money market funds, the treasury provided a temporary guarantee and the fed created a backstop liquidity program. in addition, the fdic established the temporary liquidity guarantee program to guarantee certain unsecured liabilities of depository institutions and some bank holding companies. on october 8, 2008, the federal reserve and five other major central banks jointly announced a reduction in policy interest rates. see bank of canada and others ( 2008 ). a handful of central banks in europe have recently set certain policy rates below zero. specifically, the danmarks nationalbank, the european central bank, the sveriges riksbank, and the swiss national bank have set negative policy rates. in the united states, when the federal reserve sought to provide more accommodation despite the federal funds rate being, essentially, zero, we chose not to use negative rates, judging at the time that the small additional