If policy is not implemented with skill and force and some sense of proportionality, the success of the overall endeavor could suffer. Judgments made by policymakers in the current period are likely to be as consequential as any made in the depths of the panic.
That means policymakers should continue to communicate as clearly as possible the guideposts, conditions and means by which extraordinary monetary accommodation will be unwound, including the removal of excess bank reserves. 3 It also means that policymakers should acknowledge the heightened costs of policy error.