The Committee took further action at its next scheduled meeting, on September 18, when it cut its target for the federal funds rate 50 basis points. This action was intended as a counterbalance to the tightening of credit conditions and to address in a preemptive fashion some of the risks that financial developments posed to the broader economy.
Accountability requires increased transparency and effective communication. But this brings its own challenges of how to communicate and how much to communicate. It is imperative for not only stakeholders, but also the public, to fully understand what the central bank is trying to do and the impact of its actions on the future course of the economy.