(Oktober 2015) Alan Greenspan summed up the empirical evidence well at a Federal Open Market Committee meeting in October 2000: “There is
no evidence, nor does anyone here [in the FOMC] believe that there is any evidence to confirm that sterilized in
tervention does anything.” (FOMC transcript, October 3, 2000, quoted in Bordo, Humpage, and Schwartz (2015)).

It is possible, of course, to move exchange markets temporarily even with sterilized intervention, but the impacts are uncertain. As I reported in Taylor (2007a, p. 276) based on my
experience observing each daily intervention by the Japanese in real time during the period from 2002-2003:

“If the Japanese intervene in the markets by buying a huge amount of dollars with yen, they can usually increase the price of the dollar relative to the yen. But the impacts of such interventions are temporary and their size is hard to predict because the volume of trading in the market is many times larger than even the largest interventions.”

Nevertheless, I believe that these temporary effects can lead policymakers to intervene in the markets because it is harder to
detect the offsetting effects as fundamentals soon overtake the intervention.