The key question is whether we are likely to know enough about asset price misalignments and the likely effects of policy adjustments to give us the confidence to deliberately tack away for a time from exclusive pursuit of fostering aggregate price stability and high employment. Obviously preventing situations like the current one would be very beneficial.
But against this important objective we need to balance the potential costs and uncertainties associated with using monetary policy for that purpose, especially in light of the difficulty in judging the appropriateness of asset valuations. One type of cost arises because monetary policy is a blunt instrument.