easily will deliver higher profitability, which in turn is expected to bring about further wage increases. price stability and financial system stability next, i will present my view regarding the future conduct of monetary policy. the bank has been pursuing powerful monetary easing for more than eight and a half years since the introduction of qqe in 2013. nonetheless, partly due to the impact of covid - 19, it is unavoidable that this monetary easing will be prolonged further. to achieve the price stability target of 2 percent, the bank is expected - - even after covid - 19 subsides - - to persistently continue with further effective and sustainable monetary easing, which reflects the findings of the assessment in march 2021. for monetary easing measures to have a sustained impact, maintaining the stability of the financial system is indispensable. in this regard, japan's financial system has been maintaining stability on the whole, while covid - 19 continues to have a significant impact on economic and financial activity at home and abroad. nevertheless, it is necessary to continue to pay attention to the possibility that credit costs will increase due to a delay in economic recovery at home and abroad. also, downward pressure on financial institutions'core profitability is likely to persist as a trend even after covid - 19 subsides, reflecting the prolonged low interest rate environment and structural factors such as the decrease in loan demand due to, for example, the declining population. in this situation, attention should continue to be paid to the risk of a gradual pullback in financial intermediation and to the possibility that the vulnerability of the financial system will increase, mainly as a result of financial institutions'search for yield behavior. in march 2021, the bank analyzed and assessed the impact of its monetary easing on economic activity and prices, as well as on the functioning of financial intermediation and market functioning. based on the findings, it took policy actions to conduct further effective and sustainable monetary easing. it will continue to deliberate on whether there is room for more improvement in its conduct of monetary policy by carefully weighing the positive effects and side effects of monetary easing, taking account of developments in economic activity and prices as well as financial conditions at the time. in doing so, my view is that the bank should pay due attention to the fact that side effects of monetary easing will accumulate over time. the bank will continue to conduct monetary policy in an appropriate manner so as to fulfill the two missions of achieving price stability and ensuring the stability of

increasingly severe. according to survey results, banks are applying tighter terms and conditions not only on mortgage loans but also on real estate loans for business properties and on corporate and consumer loans. recently released labor market statistics indicate that the pace of increase in employment has decelerated and the unemployment rate has risen. in this situation, however, private consumption and business fixed investment are so far continuing their moderate upward trend, although the pace of increase is decelerating. it seems likely that the u. s. economy will register relatively low growth rates in the short run but will gradually return to a path with growth rates close to the potential rate as the housing market correction progresses. however, the risk should be borne in mind that depending on future developments in the housing market correction and in global financial markets, private consumption and business fixed investment may fall below expectations through negative wealth effects, credit tightening, and deterioration in business and consumer sentiment, thereby leading to further deceleration in u. s. economic growth. the european economy continues to expand, with business fixed investment and private consumption maintaining their upward trend. however, the possible adverse effects on financial conditions of global financial market disruptions may pose a downside risk. meanwhile, emerging economies and oil producing countries have been expanding robustly and are playing a more significant role as pillars of world economic growth. thus, it seems reasonable to expect that thanks to the widening base of growth the world economy will continue to expand robustly. however, downside risks to this outlook are growing, reflecting intensified adjustment in the u. s. economy and in global financial markets. at the same time, attention should also be paid to the risk of inflation. in the united states, inflationary pressures are remaining, reflecting continued high levels of resource utilization, namely in labor and production capacity. in china, the economy continues to expand strongly, and there are signs of overheating, especially in fixed investment, despite various measures taken by the authorities to cool down the economy. the strong growth of the global economy and other factors, such as geopolitical risks and the speculative inflow of funds to commodity markets, are causing international commodity prices to remain elevated, as evidenced by the fact that crude oil prices temporarily rose above 100 dollars per barrel at the beginning of the year. thus, countries around the world face difficult monetary policy challenges in the presence of both downside risks to the economic outlook and upside risks to inflation. iii. developments in global financial markets global financial markets remain unstable,