At the same time, the Committee has continued to emphasize the upside risks to inflation and the high costs that would be associated with a failure of inflation to moderate gradually as expected. Needless to say, we will continue to monitor the inflation situation closely.
Whether further policy action against inflation will be  BIS Review 116/2006  5  required depends on the incoming data and in particular on how these data affect the FOMC's medium-term forecasts of both inflation and output growth. I have focused today on the near-term prospects for the economy and the risks to the economic outlook.