Based on my outlook, I expect that it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy. But I want to emphasize that the course of the economy and inflation remains highly uncertain, and unanticipated developments could delay or accelerate this first step.
2  BIS Review 73/2002  the benefit of enhanced flexibility, which has, at least to date, allowed us to withstand the potentially destabilizing effects of some substantial negative shocks. *  *  *  Certainly, lurking in the background of any evaluation of deflation risks is the concern that those forces could be unleashed by a bursting bubble in asset prices.