Within those models in which a Taylor rule “represents” monetary policy, the typical exercise that can answer the normative issue is the following: how would inflation over the medium term horizon react if we were to adjust our policy instruments, one at a time or all of them contemporaneously?
This is the philosophy behind our third criterion for declaring a “sustained adjustment in the path of inflation”, which is a pre-condition for starting to normalise our purchases and, indirectly, for starting to normalise our policy rates – through the sequencing we expect to follow toward a more normal configuration of policy.