Although near-term prospects for velocity behavior are uncertain, the Committee recognizes that monetary growth does appear to provide some information about trends in the economy and inflation. Therefore, we will be carefully evaluating the aggregates, relative both to forecasts and to their ranges, in the context of other readings on other variables in our efforts to promote optimum macroeconomic conditions.
An appropriate criterion should be the combined effects of all item-by-item regulations. Simply focusing on the “marginal effects” of individual measures may be misleading, even though they have good individual rationale. At the same time, we should be aware of a possible trade-off between the long-term benefits and short-term costs of stronger regulations.