Initially, the Bank was less concerned about this excessive rate of increase in the money supply, particularly also in light of the relatively low rates of increase of well below 10 per cent established in 1992 and 1993. Inflation also remained on a downward path up to April 1996.
As the broader economy continues to grow, though, I expect that we will see a turnaround in housing this year. However, there are many issues tied to the housing crisis that could impede recovery, and much depends on how these issues are addressed in the next several months. Employment is the other issue that seems difficult to understand and solve.