Well, that's another tough question. But again, that's another very good question. It is difficult to say how far along we are in that process. Let me cut into it in one particular way and see if this is helpful. Then I'll ask John to pitch in, because he spends a lot of his time thinking about the global situation, including, of course, the United States.
We obviously, in thinking about Canadian monetary policy, have to pay a great deal of attention to what goes on outside Canada, whether it's in the United States, China, India. In the case of the United States, as I noted in my opening remarks, it remains our major trading partner, but the structures of our economies are different.
Clearly, we see a very direct impact on the Canadian economy as a result of the sub-prime mortgage situation. It comes, in the first instance, through the decline in residential construction, and therefore the demand for lumber, doors, windows. You can go through the list of products that we export.
When we put together our view for the Canadian economy, which influences directly our decision-making process, we have to have a view of the United States. In our monetary policy report of last week, which you have a copy of, we've actually adjusted down, quite significantly, the U.S. outlook. We have growth in the United States in the first half of this year of only 0.5% at an annual rate. We do see it picking up in the second half of the year. Behind that, we have a further significant decline in residential construction this year in the United States, and we see some further decline next year. So we still have some way to go.
Then the other leg to this, of course, is the financial leg and the implications of this for losses, the writeoff in recognition of those losses, and the recapitalization of bank balance sheets.
John, do you wish to add a few comments?