These risks intensified in early 2001, and now appear to be materializing gradually. With respect to world economic slowdown, US economy has a key role to play. Having displayed a rapid growth of 5 percent until mid-2000, US economy has slowed its growth considerably in the second half. This slowdown proved to be more drastic than had been widely anticipated.
But I’m sure that, by articulating a clear public contingency plan and sticking to it, the FOMC can inspire greater public confidence that FOMC actions represent the systematic pursuit of its dual mandate objectives. Second, I’ve heard from businesses that policy uncertainty is curbing their incentive to hire or invest. Similarly, I’ve heard from consumers that policy uncertainty is curbing their incentive to spend.