In 2019, the Fed was deciding whether to cut its target for the federal funds rate because of the U.S. trade war with China and slowing economic growth in Europe. A news article describing the views of Federal Reserve Vice-Chairman Richard Clarida indicated that he believed the Fed “would not want to wait too long to see overseas weakness affect the U.S. economy.” Why is it potentially a problem for the Fed to “wait too long” to cut its target for the federal funds rate? Can’t the Fed just wait until unemployment begins to increase to start cutting its target?