In fact, this is exactly what happened. It would not have made sense for us to raise interest rates in the face of these temporarily very high prices for oil and gas. So even though total CPI inflation was high in the first half of 2001, the weakening economy indicated that downward pressure on inflation was coming.
We expected core inflation to fall by the end of the year, as indeed it did, and to fall further in 2002. That led to our decision to lower, not raise, interest rates. In the last few months, we've seen rapid declines in volatile components, such as gasoline, fuel oil, and air fares.