Maturity Extension Program and Reinvestment Policy
Under the maturity extension program, the Federal Reserve sold or redeemed a total of $667 billion of shorter-term Treasury securities and used the proceeds to buy longer-term Treasury securities, thereby extending the average maturity of the securities in the Federal Reserve’s portfolio. By putting downward pressure on longer-term interest rates, the maturity extension program was intended to contribute to a broad easing in financial market conditions and provide support for the economic recovery. The Federal Open Market Committee (FOMC) announced a $400 billion program in September 2011 that was to be completed by the end of June 2012. In June 2012, the FOMC continued the program through the end of 2012, resulting in the purchase, as well as the sale and redemption, of an additional $267 billion in Treasury securities.