And as central bankers we also need to carefully disentangle those residual driving forces to help us understand the possible implications for our policy stance. Let me give you a simple example: an unexpected increase in long-term rates. This is neither good nor bad, per se, from a monetary policy perspective. The implications for monetary policy depend, crucially, on the sources of this movement.
For example, if the increase reflects a re-pricing based on better current or prospective economic conditions, this would not be a source of concern for policy makers. However, if it were induced by markets overreacting to news or misunderstanding our policy intentions, this increase would be undesirable from a policy perspective.