9 Policymakers also seem to have absorbed another lesson from the recent literature, namely, the desirability of reducing the public’s uncertainty about how the central bank will respond to changes in economic conditions. To this end, central banks now strive to conduct policy in a predictable (albeit flexible) manner that is consistent with their stated objectives.
On occasion, however, the goal of predictability may conflict with the concept of risk management, particularly when risk management requires taking steps to deal with an unusual or unprecedented risk. This conflict is probably unavoidable, and all that policymakers can do in such circumstances is to try to communicate as best they can the rationale behind their departure from standard practice.