moderate pace in coming quarters, with the unemployment rate declining only gradually. fomc participants generally expected that inflation was likely to run at or below the committee ’ s inflation goal of 2 percent over the next few years. the committee also judged that there were significant downside risks to this outlook, importantly including the potential for an intensification of strains in europe and an associated slowing in global growth. federal reserve ’ s recent policy actions all of the federal reserve ’ s monetary policy decisions are guided by our dual mandate to promote maximum employment and stable prices. with the disappointing progress in job markets and with inflation pressures remaining subdued, the fomc has taken several important steps this year to provide additional policy accommodation. in january, the committee noted that it anticipated that economic conditions were likely to warrant exceptionally low levels of the federal funds rate at least through late 2014 – a year and a half later than in previous statements. in june, policymakers decided to continue through year - end the maturity extension program ( mep ), under which the federal reserve bis central bankers ’ speeches purchases long - term treasury securities and sells short - term ones to help depress long - term yields. at its september meeting, with the data continuing to signal weak labor markets and no signs of significant inflation pressures, the fomc decided to take several additional steps to provide policy accommodation. it extended the period over which it expects to maintain exceptionally low levels of the federal funds rate from late 2014 to mid - 2015. moreover, the committee clarified that it expects to maintain a highly accommodative stance of monetary policy for a considerable period after the economic recovery strengthens. the fomc coupled these changes in forward guidance with additional asset purchases, announcing that it will purchase agency mortgage - backed securities ( mbs ) at a pace of $ 40 billion per month, on top of the $ 45 billion in monthly purchases of long - term treasury securities planned for the remainder of this year under the mep. the fomc also indicated that it would continue to purchase agency mbs, undertake additional asset purchases, and employ other tools as appropriate until the outlook for the labor market improves substantially in a context of price stability. the open - ended nature of these new asset purchases, together with their explicit conditioning on improvements in labor market conditions, will provide the committee with flexibility in responding to economic developments and instill greater public confidence that the federal reserve will take the actions necessary to foster a stronger economic recovery in a context of price

research, including studies by the bis central bankers ’ speeches international monetary fund, does not support the view that advanced - economy monetary policies are the dominant factor behind emerging market capital flows. 1 consistent with such findings, these flows have diminished in the past couple of years or so, even as monetary policies in advanced economies have continued to ease and longer - term interest rates in those economies have continued to decline. second, the effects of capital inflows, whatever their cause, on emerging market economies are not predetermined, but instead depend greatly on the choices made by policymakers in those economies. in some emerging markets, policymakers have chosen to systematically resist currency appreciation as a means of promoting exports and domestic growth. however, the perceived benefits of currency management inevitably come with costs, including reduced monetary independence and the consequent susceptibility to imported inflation. in other words, the perceived advantages of undervaluation and the problem of unwanted capital inflows must be understood as a package – you can ’ t have one without the other. of course, an alternative strategy – one consistent with classical principles of international adjustment – is to refrain from intervening in foreign exchange markets, thereby allowing the currency to rise and helping insulate the financial system from external pressures. under a flexible exchange - rate regime, a fully independent monetary policy, together with fiscal policy as needed, would be available to help counteract any adverse effects of currency appreciation on growth. the resultant rebalancing from external to domestic demand would not only preserve near - term growth in the emerging market economies while supporting recovery in the advanced economies, it would redound to everyone ’ s benefit in the long run by putting the global economy on a more stable and sustainable path. finally, any costs for emerging market economies of monetary easing in advanced economies should be set against the very real benefits of those policies. the slowing of growth in the emerging market economies this year in large part reflects their decelerating exports to the united states, europe, and other advanced economies. therefore, monetary easing that supports the recovery in the advanced economies should stimulate trade and boost growth in emerging market economies as well. in principle, depreciation of the dollar and other advanced - economy currencies could reduce ( although not eliminate ) the positive effect on trade and growth in emerging markets. however, since mid - 2008, in fact, before the intensification of the financial crisis triggered wide swings in the dollar, the real multilateral value of the