about $ 300 billion in longer - term treasury securities. last november, the committee initiated an additional $ 600 billion in purchases of longer - term treasury securities, and those transactions were completed at the end of june. at our recent september meeting, the fomc announced that we intend to extend the average maturity of our securities holdings over coming months by selling $ 400 billion of short - term treasury securities and purchasing an equivalent amount of long - term treasury securities. this maturity extension program should exert downward pressure on longer - term interest rates and help make broader financial conditions more accommodative, thereby supporting a stronger economic recovery. at that meeting, we also decided that the principal the minutes of the august and september 2011 fomc meetings are available on the board ’ s website. charles l. evans ( 2011 ), “ the fed ’ s dual mandate responsibilities and challenges facing u. s. monetary policy, ” speech delivered at the european economics and financial centre, london, september 7. for example, if such thresholds were specified to be broadly consistent with professional forecasters ’ projections for unemployment and inflation in mid - to late 2013, this approach might essentially reinforce current expectations that policy firming is likely to commence around that time. alternatively, as evans has noted, some additional monetary accommodation could be provided by specifying a modestly lower unemployment threshold and a slightly higher medium - term inflation threshold, thereby leading forecasters to push back their assessments of the onset of policy firming. bis central bankers ’ speeches payments from our holdings of agency securities will now be reinvested in agency mbs rather than in treasury securities ; this step was taken to support mortgage markets. both of these decisions will affect the composition of our securities holdings without affecting the overall size of the federal reserve ’ s balance sheet or the level of reserve balances of depository institutions. nonetheless, it is worth noting that the scale of the maturity extension program is necessarily limited by the amount of our holdings of shorter - term securities ; furthermore, purchasing a very large proportion of the outstanding stock of longer - term treasury securities could potentially have adverse effects on market functioning. thus, securities purchases across a wide spectrum of maturities might become appropriate if evolving economic conditions called for significantly greater monetary accommodation. monetary policy communications in recent years the fomc has taken a number of significant steps to enhance the clarity of our communications about our longer - run objectives, our medium - term outlook, and our policy strategy. transparency is an essential aspect of

, and as their analysis compares 1991 - 2001 to earlier periods they miss a very recent acceleration toward floating exchange rates and inflation - focused monetary policies. policy should focus on delivering low and stable inflation, with the determination of exchange rates left to free markets. the most consequential exception to the general trend toward inflation stabilization, free capital markets, and floating exchange rates is, of course, china. china currently has relatively strict - though not absolutely impermeable - barriers to capital flows, as well as an exchange rate that is effectively pegged to the u. s. dollar. the governments of the united states and the other g - 7 countries have urged china to make the transition to a market - determined exchange rate, in the interest of promoting global macroeconomic adjustment. i will add here only that moving toward exchange rate flexibility is in the interest of china as well as the rest of the world. as a large, increasingly wealthy, and increasingly market - oriented economy, china will benefit from the shock - absorber properties of an independent monetary policy and a floating exchange rate. because it needs capital to fuel its rapid growth and because its citizens would benefit greatly from the opportunity to invest their own savings abroad, china will likewise benefit from increased capital freedom. finally, the institutional developments needed to support ever - more - open capital markets, including a strengthened legal and regulatory framework, an increased capacity of its banks to allocate capital to the most productive uses, and a reduced role of the government in investment decisions, are themselves necessary and important steps in china ’ s economic modernization. the united states will also benefit as china and other east asian countries make the transition to floating exchange rates and freer capital flows. more - open capital accounts and market - determined exchange rates will likely engender greater stability and improved resource allocation in asia, setting the stage for sustained future growth. the development of the asian economies will expand export markets for u. s. producers, particularly as independent monetary policies and institutional reform provide scope for stimulating demand by asian households and firms. some observers have expressed concern about the effects of reduced reserve accumulation by asian central banks on u. s. bond markets ; however, the u. s. bond market is extremely deep and has shown a remarkable capacity to handle transitions smoothly, particularly when they occur in a gradual and predictable manner. moreover, under a regime of free capital mobility, private savers in china and the rest of east asia may well wish to diversify into u.