The interaction of uncertainty and concerns about undershooting may well have affected Fed policy during the easing cycle that began in 2001. During that cycle, the FOMC faced a worrisome trend of disinflation, a trend that if left unchecked might have brought the economy close to the zone of falling prices, or deflation.
The FOMC had two options during that episode: gradual easing, which some observers advocated as a way of saving the remaining “interest rate ammunition”; or a more preemptive approach, to try to nip in the bud any further decline of inflation toward the deflation boundary.