First, by leveraging quantitative monetary policy tools, we expanded aggregate supply with a focus on easing financing difficulties.
This output profile means that there will be an appreciable amount of excess supply in the economy through 2002. Because of this, we see core inflation averaging just under 1 ½ per cent in the second half of 2002—below our 2 per cent target. Total CPI inflation should remain below the core rate until late 2002.