Then, when is appropriate timing for adjusting interest rates before inflation risk becomes a matter of concern? If we can come up with a perfectly accurate economic outlook as well as the time needed for the policy effect to permeate the economy, we should conduct farsighted and preemptive policy at the right time on an appropriate scale.
This is always an ideal vision for central banks. In fact, the Bank of Japan has been making efforts to accurately analyze the past, present, and future economy. Though we make policy judgments based on these analyses, admittedly we conduct monetary policy under great uncertainty with limited second sight as well as imperfect data and information just like the metaphor of the car driver.