In addition, I believe that the risks to the inflation outlook have become more balanced, given the greater downside risks to real growth. Let me shift gears and discuss developments in financial markets. As you know, the recent turmoil had its beginnings in the subprime mortgage market.
4 The development of the subprime market in the 1990s was an important financial innovation that enabled borrowers with higher credit risk to obtain mortgages that previously were unavailable to them. This expansion appears likely to have been a significant factor in raising the rate of homeownership from 64 percent, the level in 1994, to about 68 percent currently.