Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

The second thing goes back to this business of the judgmental effects of financial market turmoil. Do you have any concern that the financial turmoil may have reduced the marginal effectiveness of changes in the funds rate? In other words, if you think in my simple way of a patient on the operating table, we have an IV tube into them, we titrate the fed funds rate—we have been cutting rates—but the tube has been crimped. The flow, I would suggest may not be as full as it would have been before. Is it possible that we haven’t felt the full effects or, all things being equal, we haven’t felt the same effects that we would have felt if the pipes hadn’t been crimped? I’m curious as to your view on that.

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