6 Presuming that the first passage time probability of a stochastic process obeys the Wald distribution, the  probability of inflation rates hitting a threshold before a time horizon is estimated, assuming a 2 percent threshold and measurement horizon of two years.
3  The domestic financial sector is defined here as domestic banks and nonbank financial institutions, excluding the monetary authority. Banks include U.S.-chartered depository institutions, foreign banking offices in the United States, banks in U.S.-affiliated areas, credit unions, and holding companies.