I won't comment specifically on the decisions by the U.S. Federal Reserve, but I will remind you—and I said this when we last met—that in our projection for the Canadian economy we have a projection for the U.S. economy, and in that projection for the U.S. economy we had built in a significant degree of easing on the part of the Federal Reserve, a degree of easing beyond what they have done to date. So we see, as does everyone else, the weakness in the U.S. economy, a weakness that is far greater than in our own economy, and we did see the need for the U.S. Federal Reserve to ease policies. From that point of view, there is nothing that has surprised us in terms of the direction or the orders of magnitude. In fact, our base case incorporates some additional reduction beyond what they have done to date.
In terms of other factors that we look at, clearly our focus, and rightly so, is on our 2% inflation target, but we also believe that by keeping that focus on the 2% inflation target we're providing the right stability for good overall economic performance for the Canadian economy. Of course, in targeting on that 2%, we have to assess whether the Canadian economy is weakening or growing more robustly.
What are the interest rate implications of that? We looked at the risks around that. In our report we looked at not only our base-case projection but the risks around that, and we saw both upside and downside risks. One of the downside risks we saw was indeed the possibility of a weaker U.S. economy. We've talked about that, but we also saw some risks on the upside. So the short answer to your question, Mr. Chairman, is that we look at many factors that have a bearing on the Canadian economy, because ultimately it's the performance of the Canadian economy that is going to determine the inflation rate, and we have to respond in either direction in a symmetric way to keep inflation on track and, through that, do what we can to keep the overall performance of the Canadian economy stable and growing.