Thank you for the question.
We really do look to apply our inflation-targeting framework. We look at the lags on monetary policy, which tend to run from four to six quarters out. We look at the scale of the difference between the potential of the economy and where the economy is operating. I think in that regard it's very important, Mr. McCallum, that we are disciplined in our judgment about the potential of the economy, because one of the mistakes one can make in these situations is to overestimate the speed limit of the economy in a severe recession.
The reality is, and it's an unfortunate reality, but in this adjustment process, capacity is lost, investment is delayed, productivity is slower than it otherwise would be, and so those inflationary pressures could come back sooner than otherwise. We've made an important revision to our potential output in this forecast, as Mr. Wallace was referencing.
I should say as well that we've made the commitment that given the relative importance of this forward-looking fan chart on inflation and the link to the conditional commitment, we will revisit that in our October monetary policy report as well.