For example, inflation expectations hardly changed in the aftermath of 9/11 and of the oil price increases of 2004-05.The next chairman will start with a base of institutionalised confidence, but the market will naturally be somewhat sceptical until the new chairman has established his or her own track record. Put another way, the Fed's inflation-fighting credibility may be somewhat more fragile over the next few years.Almost certainly, future chairmen will address the issue of whether the bank should adopt a formal inflation target, which many economists and a number of members of the Federal Open Market Committee, including me, have espoused.. It was hard yesterday in New York to watch the news coming in from London. Our hearts were suddenly one with yours, never mind that we are so far away Because we know how it is with you at the moment. We also have a fairly good idea how it will be for you in the days and months ahead, and we are sorry. For me in Manhattan, yesterday began with incessant ringing of my phone. Had I seen? Were my loved ones alright? Finally, I ran to the coffee shop around the corner for caffeine.

Rob was there as usual, but his assistant, Lucy, had called in to say she was too scared to ride the subway. That tells you about New York nearly four years after our Armageddon. Sure, we are on our feet again, even though our loss was more staggering - almost 3,000 innocent lives In many respects, the city is booming even. But it was more than people that those two jet planes killed. It was also the unthinking sense of security that we once enjoyed. The fear recedes over time, of course, but it doesn't go away.I was in the subway here on Wednesday when the train stopped between stations The way the breaks kicked in so abruptly didn't seem normal.

I looked around the carriage - it was the morning rush - and said to myself: isn't it weird, every one of us is thinking exactly the same thing. Has something bad happened? How will we get out? Nothing was amiss, in fact, not like in London yesterday.This, I'm afraid, is how it will be in London. Many things will make you wonder when nothing, in fact, is wrong. Hear more than one police siren outside your window and you will switch on the TV, just in case Notice a police helicopter in the sky, you will do the same Two summers ago, we had our big blackout in New York. You know what we were thinking when the lights first went out.The conversations about 9/11 still haven't ended. Just days ago, an acquaintance expressed, almost out of the blue, his uneasiness about working in a tall building near Pennsylvania Station. The area, with the Empire State Building close by, was too obviously a target for what might come next in New York, he said I occasionally have the same concern.