The first is to ensure corporate financing. To this end, it is essential to maintain financial system stability and accommodative financial conditions, thereby avoiding further downward pressure on the real economy from the financial side. The second point is whether firms’ and households’ growth expectations will decline and lead to cautious attitudes toward spending.
However, core prices-those excluding food and energy-have continued to rise rapidly. In particular, inflation in core goods prices has been surprisingly strong, in part because the elevated demand for goods we saw during the height of the pandemic has taken longer to abate than previously anticipated. Still, there are reasons to expect core goods inflation to slow in coming months.