9  Because the term structure is normally upward sloping, especially during periods of economic weakness, longer-term rates could be significantly above zero even when the overnight rate is at the zero bound. 10  See Hetzel and Leach (2001) for a fascinating account of the events leading to the Accord. BIS Review 68/2002  5  substantially more variable.
Slamming on the brakes or abruptly changing course could disrupt the economy. Failing to slow down and exit at the right time risks excessive inflation, which then has to be controlled. It also risks the misallocation of resources and capital, and perhaps even credit bubbles or other distortions that could pose problems for the economy.