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Specifically, he sees three reasons for gradualism: ?(1) policymakers? uncertainty about the economy should lead to more gradual adjustment of the policy rate; (2) gradualism in adjusting the policy rate affords policymakers greater influence over the long-term interest rates that most affect the economy; and (3) gradualism reduces risks to financial stability.? [ 1 ] i would add that smooth rate moves gives the fed a strong reputation for having a steady hand on the tiller.

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