Alan Blinder in the Wall Street Journal who writes that the central bankers need to act like the tortoise, not the hare, lest they overshoot and cause a recession…
Traders and policy makers alike should also remember Friedman’s sage warning that monetary policy affects inflation only with “long and variable lags”—emphasis on long. If policy makers forget the long lags and grow apprehensive when higher interest rates apparently do nothing for a long while, they may be tempted to keep raising rates—thereby causing an overshoot. It takes a great deal of patience to get monetary policy right, and unfortunately, we humans aren’t a naturally patient lot.