As the output gap has been maintained within positive territory -- showing excess demand -- for a long time, in reflection of economic expansion, many of the aforementioned factors that have been constraining inflation will likely be resolved gradually.
If that happens, another important factor that forms the underlying trend in prices is likely to change -- that is, people's perception of prices, which means inflation expectations in a broad sense, including households' tolerance of price rises and firms' price-setting strategies. The Bank assesses such factors that determine the underlying trend in prices by using the word "momentum."