In my view, the Federal Reserve's recent monetary policy actions – reducing the target federal funds rate by 1 percentage point last fall and by a further 1-1/4 percentage points in January – have been consistent with these principles for coping with macroeconomic risk. First, we have been proceeding in a timely manner in countering developments that could threaten economic or financial stability.
In particular, the stance of monetary policy has been eased promptly in response to the rapid deterioration in financial market conditions, which had worsened the economic outlook and contributed to the emergence of pronounced downside risks to economic growth and employment.