The Fed's decision to restart its large-scale asset purchases, this time with an open-ended agency MBS programme, is part of what could potentially be a much wider shift in the monetary policy framework. Along with the launch of QE3, changes in the statement released after the last FOMC meeting made it clear that the Fed is now putting a lot more weight on fulfilling the full employment side of its dual mandate and that it would be willing to allow inflation to run above its target, albeit only temporarily, in order to bring the unemployment rate down to more normal levels.
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