Therefore, in this environment of w ell-informed expectations and trust  in the stabilising capacity and potency of  instruments arsenal of the authorities, there is less risk of market overreaction to the path of economic indicators. Indeed, economic agents might take stabilising and policy reinforcing decisions.
Monetary policy plays an important role in stabilizing the economy in response to these disturbances. The Committee’s primary means of adjusting the stance of monetary policy is through changes in the target range for the federal funds rate.