This would affect the speed with which underlying inflation picks up and therefore the inflation path that we expect to see in the quarters ahead. When the Governing Council met in October, we confirmed our confidence in the economic outlook. The underlying strength of domestic demand and wages continues to support our view that the sustained convergence of inflation to our aim will proceed.
As detailed in the box on financial stability in the June Monetary Policy Report, the Federal Reserve, together with the Treasury Department and the Federal Deposit Insurance Corporation, took decisive action in March to protect the U.S. economy and to strengthen public confidence in our banking system.