that, assuming inflation is near the committee ’ s long - run target, it will likely be necessary to begin the process of removing accommodation before the longerrun normal rate is reached. the survey of primary dealers is available on the federal reserve bank of new york ’ s website. see board of governors ( 2012b ). bis central bankers ’ speeches for - longer considerations to pertain to the path of the federal funds rate both before and after liftoff. in addition, the guidance specifies thresholds for possible action, not triggers that will necessarily prompt an increase in the federal funds rate. the fomc statement therefore notes that “ in determining how long to maintain a highly accommodative stance of monetary policy, the committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. ” 20 for example, the committee could decide to defer action even after the unemployment rate has declined below 6 – 1 / 2 percent if inflation is running and expected to continue at a rate significantly below the committee ’ s 2 percent objective. alternatively, the committee might judge that the unemployment rate significantly understates the actual degree of labor market slack. a decline in the unemployment rate could, for example, primarily reflect the exit from the labor force of discouraged job seekers. that is an important reason why the committee will consider a broad range of labor market indicators. i will discuss some of the additional indicators i plan to consider in judging the strength of the labor market in connection with the committee ’ s current asset purchase program. the federal reserve ’ s asset purchase program turning next to that program, the federal reserve initiated a new asset purchase program last september, extending it in december, under which the federal reserve is currently buying agency - guaranteed mbs at a pace of $ 40 billion per month and longer - term treasury securities at a pace of $ 45 billion per month. as with the guidance for the federal funds rate, the committee tied the new program to labor market conditions, stating that purchases would continue until there is a substantial improvement in the outlook for the labor market in a context of price stability. 21 the fomc ’ s earlier large - scale asset purchase programs, in contrast, were fixed in size and carried out on a specified schedule. the committee has also noted that, in determining the size, pace, and composition of its asset purchases, it would take appropriate account of the likely efficacy and costs of such purchases. the

mras are supervisory communications that identify areas where banks are out of compliance with applicable legal standards or otherwise are engaged in practices that create substantial safety and soundness risks. mras identify the source of the compliance failure, deficiency, or safety and soundness weakness and generally include an expected timeframe for remediation. mras are not legally binding and are not enforcement actions. nevertheless, mras carry weight because they can affect a bank ’ s supervisory rating. in limiting mras to legal violations and significant supervisory concerns, we would take care to clearly define the breadth of what constitutes a “ material safety and soundness issue. ” this distinction is important as a matter of fairness. banks should be able to understand the line between mras significant enough to affect the bank ’ s supervisory rating and less significant matters that don ’ t affect a bank ’ s supervisory rating but raise concerns that should be considered by banks. greater fairness contributes to greater supervisory effectiveness. together, the third and fourth process improvements would be calibrated to improve communications so that banks can focus on remediating key weaknesses while maintaining awareness of emerging ones. ultimately, a bank that promptly corrects its material safety and soundness weaknesses will be better able to serve its customers and intermediate credit through a range of scenarios, including under stress. the final process improvement is to make routine our existing practice of having an independent review of important supervisory communications and guidance documents. we want to make sure that our supervisory communications, including mras, focus on violations of law and 6 / 7 bis central bankers'speeches material safety and soundness issues and that these communications don ’ t mistakenly give the impression that supervisory guidance is binding. we already closely scrutinize mras issued to the liscc firms and in horizontal reviews of other large domestic and foreign banks. this extra scrutiny is a sensible practice that should be regularized and expanded across our supervisory portfolios. with respect to prospectively assessing future guidance, the key goals here would include reassessing the scope of key guidance documents, removing inappropriate bright lines from guidance, and removing any mandatory language from guidance. i will discuss each of these goals in turn. as i mentioned, the board adopted a final tailoring rule last year that adjusted the regulatory standards applicable to banks, based on their risk profile. i think it would be useful for us to review our guidance in light of this tailoring exercise, such as guidance on stress testing and capital planning, and to update the scope of guidance where