Of particular significance is the level of financial inclusion, which is now assessed to have increased from 48 percent in 2007 to 69 percent by 2011. Put differently, financial exclusion, which stood at an estimated 51.7 percent in 2007, has significantly fallen to 31 percent by 2011.
Committee participants have generally reacted to these developments and the risks they pose by shifting down their projections of the appropriate federal funds rate path. Along with July’s rate cut, the shifts in the anticipated path of policy have eased financial conditions and help explain why the outlook for inflation and employment remains largely favorable.