Nonetheless, it has already gone considerably further than most observers anticipated. When we lift our gaze beyond the conventional forecasting horizon, the big picture is that the emergence of potentially very large economies like China and India, at such a rapid pace and with such consistency, is unlike anything we have lived through before.
We cannot be confident, therefore, that the cyclical experience of the past few decades is necessarily a reliable guide to how things will develop. In its policy deliberations over several months, the Board has weighed conflicting trends. When we were last before you, we were observing an apparent moderation in inflation.