Another complication is that the environment in which interest rates are being adjusted is not the same from one interest rate phase to the next. As a result, the exact way that movements in interest rates are transmitted to the economy can change over time. All this means that, as always, we need to monitor things very closely.
See Board of Governors of the Federal Reserve System (2008), “FOMC Statement and Board Approval of Discount Rate Requests of the Federal Reserve Banks of New York, Cleveland, Richmond, Atlanta, Minneapolis, and San Francisco,” press release, December 16; Board of Governors (2009), “FOMC Statement,” press release, March 18, Board of Governors (2011), “FOMC Statement,” press release, August 9; Board of Governors (2012), “Federal Reserve Issues FOMC Statement,” press release, January 25; and Board of Governors (2012), “Federal Reserve Issues FOMC Statement,” press release, September 13.