quarter of 2016, when the bank introduced qqe with yield curve control, however, the slope of the trend line has become gradual and the line's level has declined slightly, although these changes should be regarded as being subject to a margin of error due to a limited sample size ( chart 7, green line in the left - hand panel ). this suggests the possibility that, although the first channel has been operating, the other three channels have not yet been doing so to their full extent. 3 in other words, under the current monetary policy framework, supply - demand conditions are tightening further, but this has not yet affected firms'overall price - setting stance toward raising prices. 4 it also should be noted that the rise in inflation expectations remains moderate, partly reflecting the moderate pace of increase in the observed inflation rate. short - term inflation expectations have increased somewhat, due mainly to the rise in crude oil prices, but they have not recovered to the level seen in the period between mid - 2014 and mid - 2015, when such expectations shifted from increasing to being flat. medium - to long - term inflation expectations remain somewhat weak ( chart 8 ). i would note that the inflation - overshooting commitment was effective in stopping a decline in inflation expectations, but it has not been sufficient to clearly increase inflation expectations. on the basis of such understanding, i believe that further monetary easing is necessary to achieve the price stability target at an early stage. specifically, the bank should purchase jgbs so that yields on jgbs with maturities of 10 years and longer will broadly be lowered further. with a view to reinforcing the inflation - overshooting commitment, the bank should also add the commitment that, in terms of the medians of the policy board members'these facts also can be confirmed from an estimate of the phillips curve with time - varying parameters ( chart 7, the right - hand panel ). the output gap estimated by the bank's research and statistics department became positive from the october - december quarter of 2016 and has increased further to 1. 35 percent in the july - september quarter of 2017. having said that, a further widening of the output gap is necessary to affect firms'overall price - setting stance toward raising prices, in view of the fact that the average of the output gap was in the range of 2. 5 - 3. 0 percent in the past when the year - on - year rate of increase in the cpi ( all items less fresh food and

of strong and sustained economic growth in jamaica. bis central bankers ’ speeches final remarks the current fragility in the global environment has made the prospects for strong output growth in 2011 and 2012 more daunting. however, while continued fiscal consolidation may contribute to a moderation in domestic demand, the far - reaching economic reforms that have been set in progress with exceptional levels of support from our multilateral partners will provide a foundation for lasting growth. progress under the economic programme is already being reflected in an extended period of almost unprecedented stability in the macroeconomic environment and improving business confidence. in addition, economic growth was experienced for the first two quarters of 2011, reversing the trend decline over the previous 13 quarters. it is worth re - emphasising that inflation is expected to be lower in the second half of the fiscal year given the projection for slower international commodity price increases, a relatively stable exchange rate and weak but improving domestic demand. further deceleration in inflation is expected in the subsequent years. against this background, interest rates, which have been at their lowest in almost three decades, can be expected to follow a consistent path. ladies and gentlemen, the jamaican economy is in the midst of a transition to enduring macroeconomic stability, low interest rates and sustained growth. i encourage the members of the icaj actively to support this process. thank you. bis central bankers ’ speeches