8  BIS central bankers’ speeches  federal funds rate is set to balance the benefits from a faster reduction of the unemployment rate against the losses from a temporary and modest increase of inflation above 2 percent.
The more rapid reduction in unemployment along the optimal control path than in the baseline reflects the stimulus to demand provided by lower nominal and real interest rates, higher asset prices, and the expectation of more rapid growth in employment and income. 19 The computation of an optimal path for monetary policy is obviously complicated, and, as I’ll discuss, it’s challenging to communicate.