stock market. in this regard, i had disagreed four times consecutively with the bank ’ s risk assessment that was described in the statement on monetary policy released immediately after each monetary policy meeting ( mpm ) from january through early april this year. the disagreement reflected my concern that the bank ’ s statement on monetary policy referred only to developments in overseas economies as a risk factor, and did not mention the pace of improvement in the employment and income situation in japan as a downside risk. it is now clear that this risk has materialized and played a major role in the downward revision to the bank ’ s outlook. nevertheless, private consumption recently started to recover gradually and the consumption level will likely recover to the level observed before the front - loaded increase by around the january - march quarter of 2015. regarding exports, my risk assessment has also been consistently tilted downward because of concerns about sluggish external demand. this time, i revised downward my outlook on exports because the downside risk had materialized somewhat. however, since my outlook on imports was adjusted downward as well, the net impact on the trade balance is projected to remain limited. my projection is that the growth rates for both fiscal 2015 and 2016 will likely be much higher than the rate for fiscal 2014. however, they have been adjusted downward somewhat, mainly for private consumption, from my july interim assessment. this adjustment reflects my observation that the rate of increase in nominal employee income may slow down somewhat in fiscal 2015 and 2016 because of the following. ( 1 ) slower growth in corporate profits for fiscal 2014 relative to that in 2013 – although still at a high level – may result in slower growth of nominal wages for regular workers in fiscal 2015. ( 2 ) a further expansion in employment is becoming increasingly difficult since unemployed workers have largely disappeared except for those caused by mismatches. ( 3 ) additional labor hours generated by newly employed workers have been declining since many women and elderly people who are willing to work often prefer short - time working hours. ( 4 ) current employment growth includes many non - regular workers whose wage growth remains limited, while there is a declining trend in employment growth among regular workers in manufacturing, whose productivity growth and thus wage growth have exceeded other sectors. finally, ( 5 ) it is not yet confirmed whether households ’ expectations regarding future income will follow a rising trend. the estimated potential economic growth rate has been repeatedly revised downward and currently remains below 0. 5 percent ( chart 2 ). i judge that this decline reflects not only a bis central

a greater emphasis on monetary easing effects that promote the portfolio rebalancing channel, as i will explain later. therefore, i expect that the additional easing, which lengthens the average remaining maturity of long - term jgbs and increases the purchases of risk assets, would further enhance the transmission channels of monetary policy. d. the transmission channels related to qqe next, i would like to touch on the transmission channels of the banks ’ s monetary easing. qqe aims to exert downward pressure on nominal and real long - term interest rates through a range of transmission channels, thereby lowering funding costs as well as raising asset prices. ultimately, these changes are expected to boost the aggregate demand of firms and households, and raise the rate of inflation toward around 2 percent. given that jgb purchases are the main instrument under qqe, i will briefly discuss the transmission channels with a focus on jgb purchases. to simplify the discussion, let me categorize the transmission channels into three types. the first transmission channel is called the signaling channel, in which the bank transmits its future monetary easing policy stance to the public and the market through jgb purchases. this would possibly lower market expectations over the future path of short - term interest rates, thus lowering nominal and real long - term interest rates. the resultant decline in riskfree interest rates would likely raise the prices of securities and real estate ; a decline in interest rates and an increase in the value of collateral would lower firms ’ and households ’ funding costs. the resultant decline in hurdle rates would also help expand the amount of bis central bankers ’ speeches business fixed investment made by each firm ; an increase in a wide range of asset prices held by firms and households would promote business fixed investment and consumption. the greater soundness of financial institutions ’ balance sheets and capital would likely promote greater risk - taking behavior, and thus, more active investment and lending domestically as well as abroad. this channel is likely to initially exert stronger downward pressure on nominal long - term interest rates, but as the rate of inflation begins to pick up, these interest rates are expected to rise gradually. the second channel is called the portfolio rebalancing channel, in which the bank exerts downward pressure on the term premium and thus lowers nominal and real long - term interest rates. this channel aims to encourage financial institutions ( and investors ) to change the composition of their portfolios, thereby lowering funding costs and raising asset prices directly. when the bank purchases