The Federal Reserve last week announced that it would reinvest proceeds from its massive mortgage-bond portfolio, sustaining what Chairman Ben Bernanke had in February called its “extraordinary lending and monetary policies.” But there must eventually be an exit from such policies. And if the chairman is to be taken at his word, the Fed’s exit strategy will involve a sea change in the way it conducts and communicates its policies. In particular, it implies that the Fed will no longer be able to control the critically important fed-funds rateā€”or indeed any interest rate at all. That would have far-reaching implications for the future of monetary policy.