Then many monetary policy rules would recommend that the FOMC not ease policy further and in fact consider reducing the level of monetary policy accommodation. That recommendation – don’t ease further if you’re doing better on your mandates – makes sense to me. With that recommendation in mind, let’s go back to November 2010.
At that date, the FOMC took a significant policy step by announcing its intention to buy $ billion of longer-term Treasury securities. Until the most recent meeting in August, this was the last major policy step undertaken by the Committee. What did available measures of inflationary pressures and labor market slack – the “mandate dashboard” – look like back in November?