Any tendency for longer-run inflation expectations to become unanchored would pose a significant problem for monetary policy makers, and the FOMC will be closely monitoring inflation and inflation expectations in coming months. To summarize, with the economic outlook having deteriorated significantly and financial markets under considerable stress, the FOMC will face significant challenges.
As noted in the statement following the January meeting, the FOMC "will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed" to address risks facing the economy (FOMC, 2008).