All these sources of uncertainty mean that, when we look back on the way in which monetary policy was formulated in March 1999 from the vantage point of, say, 2002, what seemed like well-founded decisions as we finalised our decision on the Official Cash Rate last week may seem hard to justify.
Because of the delay between monetary policy action and the effects of that action on the real economy and, through those effects, on inflation, we have no alternative than to formulate policy in full recognition of this inherent uncertainty. This has several implications, and this is not the place to spell out all of them.