This raises the risk, which I referred to earlier, of a disorderly unwinding down the line, with significant potential fallouts for global financial markets and the global economy. At their Cannes Summit on 3–4 November 2011, G20 Leaders agreed on an Action Plan to lay the foundations for strong, sustainable and balanced global growth in the medium-term. This is welcomed.
For example, unless underlying economic conditions or risks change substantially, reductions in the target federal funds rate tend to be associated with decreasing incremental benefits in terms of further mitigating tail risks and with increasing incremental costs in terms of the potential for inflation to increase.