The actions taken at the September meeting were intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets – that is, to reduce the macroeconomic tail risk, and to promote moderate growth over time – or, put another way, to increase the likelihood of achieving a desirable path for economic activity.
Economic growth appeared likely to run below its potential for a while. Given incoming inflation data to the favorable side and reasonably well anchored inflation expectations, the costs of easing policy, measured in terms of heightened inflation risks, seemed relatively low.