We can employ our one instrument to temper or augment the net effect of changes in these factors on spending and production, but we do not have the tools to respond to each individually. Our tool is most efficiently deployed to adjust overnight interest rates. There is a more general principle at work here.
No doubt, the balance sheet of the Federal Reserve is large and the attention paid to our pronouncements intense. Nobody would deny that central banks can be quite powerful and that monetary policy works, over time.