Our problem is not, as is sometimes alleged, the complexity of our policymaking process, but the far greater complexity of a world economy whose underlying linkages appear to be continuously evolving. Our response to that continuous evolution has been disciplined by the Bayesian type of decisionmaking in which we have engaged.
*** While all, no doubt, would prefer that it were otherwise, there is no way to dismiss what has to be obvious to every monetary policymaker: The success of monetary policy depends importantly on the quality of forecasting. The ability to gauge risks implies some judgment about how current economic imbalances will ultimately play out.