Regarding the outlook, the main scenario is that private consumption will remain stagnant for the time being while public health measures are in place or vigilance against COVID-19 continues, but the recovery trend in Japan's economy will subsequently become more pronounced as the impact of COVID-19 gradually wanes.
To illustrate, let me discuss two situations that are particularly relevant in the current context—the first leads to more-aggressive policy actions and the second leads to what is often referred to by central banks as “caution” or “patience.” When uncertainty can motivate aggressive policy action The first situation is best illustrated by considering how to conduct monetary policy when interest rates are close to the effective lower bound (ELB).