A prolonged downturn could still present a threat to inflation and employment objectives. Increased confidence that robust demand and supply constraints will feed through into more persistent inflation pressures, and that employment is at its maximum sustainable level. Maintain stimulus until confident that inflation and employment objectives will be sustainably achieved. Reduce monetary policy stimulus to reduce the risk that inflation expectations become unanchored.
Bias of risks to the outlook  Our ability to stimulate the economy could have been constrained by the Effective Lower Bound. Risks to achieving our mandate  Significant threat to employment mandate if risks to the economy materialised. A decade of below-target inflation increased risk of expectations becoming deanchored on the downside.