The Fed lacks sufficient knowledge with respect to
the lagged effects of a policy action.
Not exact matches
The Fed also claims that the
effects of its monetary
policies lag behind the reported data, making the current rate hikes necessary to prevent problems in the future.
Another unrelated note: I'll add that the softness in activity is consistent with the
lag in monetary
policy — that is, the
effect of the stimulus provided in January has not fully made its way through to the real economy.
With Greenspan, since monetary
policy works with a
lag, we have a better perspective today on what the true
effects of his tenure were.