Last November, my forecast for annual real GDP growth was similar to that of other FOMC participants: I expected that real GDP growth would average above 3 percent per year, and probably closer to 3.5 percent per year, over the following two years (that is, from the fourth quarter of 2010 through the fourth quarter of 2012).
This said, we will of course remain vigilant with respect to the possibility of an impact on inflation rates in the first months of this year. Over the long run, however, downward pressures on prices should predominate in the euro area, thanks to the increased transparency and stronger price competition the physical introduction of the euro has been inducing.