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September/October 1998, 
Vol. 80, No. 5
Posted 1998-09-01

A Policymaker Confronts Uncertainty

by William Poole

This article is a reprint of a speech given by William Poole, president of the Federal Reserve Bank of St. Louis, to the St. Louis Gateway Chapter of the National Association for Business Economics. In today’s environment, economic uncertainties abound both abroad and at home. Poole discusses the five categories of uncertainty facing today’s policymakers: (i) the data; (ii) future events, shocks, and disturbances; (iii) how the economy works; (iv) market reactions to Fed policy; and (v) market anticipations of Fed policy. He also discusses the Federal Reserve’s role in dealing with each of these uncertainties and today’s policy environment.