As I have already noted, monetary policy works only with a lag and hence cannot offset these near-term effects; rather, the recent cuts in the federal funds rate are intended to help bring economic activity back to maximum sustainable levels over time, and such an outcome can be seen in the broad contours of the FOMC projections.
6  BIS Review 140/2007  There is considerable diversity in the views of participants about the outlook for near-term growth. The range of forecasts for the growth of real GDP in 2008 is from 1.6 percent to 2.6 percent--twice as wide as in the previous set of FOMC projections, which were published last June.